Lex Fridman Podcast - #467 – Tim Sweeney: Fortnite, Unreal Engine, and the Future of Gaming

Episode Date: April 30, 2025

Tim Sweeney is a legendary video game programmer, founder and CEO of Epic Games that created the Unreal Engine, Fortnite, Gears of War, Unreal Tournament, and many other groundbreaking and influential video games. Thank you for listening ❤ Check out our sponsors: https://lexfridman.com/sponsors/ep467-sc See below for timestamps, and to give feedback, submit questions, contact Lex, etc. CONTACT LEX: Feedback - give feedback to Lex: https://lexfridman.com/survey AMA - submit questions, videos or call-in: https://lexfridman.com/ama Hiring - join our team: https://lexfridman.com/hiring Other - other ways to get in touch: https://lexfridman.com/contact EPISODE LINKS: Tim's X: https://x.com/timsweeneyepic Epic Games: https://epicgames.com/ SPONSORS: To support this podcast, check out our sponsors & get discounts: Notion: Note-taking and team collaboration. Go to https://notion.com/lex MasterClass: Online classes from world-class experts. Go to https://masterclass.com/lexpod Shopify: Sell stuff online. Go to https://shopify.com/lex AG1: All-in-one daily nutrition drink. Go to https://drinkag1.com/lex LMNT: Zero-sugar electrolyte drink mix. Go to https://drinkLMNT.com/lex OUTLINE: (00:00) - Introduction (08:25) - 10,000 hours programming (11:42) - Advice for young programmers (19:54) - Video games in the 80s and 90s (22:02) - Epic Games origin story (34:40) - Indie game development (40:34) - Unreal Engine (1:06:30) - Technical details of Unreal Engine (1:11:23) - Constructive solid geometry (1:17:21) - Dynamic lighting (1:21:51) - Volumetric fog (1:25:19) - John Carmack (1:27:05) - Evolution of Unreal Engine (1:33:21) - Unreal Engine 5 (1:44:32) - Creating realistic humans (1:53:41) - Lumen global illumination (1:58:11) - Movies (2:12:53) - Simulating reality (2:25:08) - Metaverse (2:27:44) - Fortnite (2:31:40) - Scaling (2:47:04) - Game economies (2:48:33) - Standardizing the Metaverse (2:56:46) - Verse programming language (3:18:19) - Concurrency (3:25:56) - Unreal Engine 6 (3:30:34) - Indie game developers (3:33:32) - Apple (3:48:12) - Epic Games Store (4:11:03) - Future of gaming (4:17:03) - Greatest games ever made (4:22:39) - GTA 6 and Rockstar Games (4:25:58) - Hope for the future PODCAST LINKS: - Podcast Website: https://lexfridman.com/podcast - Apple Podcasts: https://apple.co/2lwqZIr - Spotify: https://spoti.fi/2nEwCF8 - RSS: https://lexfridman.com/feed/podcast/ - Podcast Playlist: https://www.youtube.com/playlist?list=PLrAXtmErZgOdP_8GztsuKi9nrraNbKKp4 - Clips Channel: https://www.youtube.com/lexclips SOCIAL LINKS: - X: https://x.com/lexfridman - Instagram: https://instagram.com/lexfridman - TikTok: https://tiktok.com/@lexfridman - LinkedIn: https://linkedin.com/in/lexfridman - Facebook: https://facebook.com/lexfridman - Patreon: https://patreon.com/lexfridman - Telegram: https://t.me/lexfridman - Reddit: https://reddit.com/r/lexfridman

The following is a conversation with Tim Sweeney, a legendary video game programmer, founder and CEO of Epic Games, that created many incredible games and technologies, including the Unreal Engine and Fortnite, which both revolutionized the video game industry and the experience of playing and creating video games. And now a quick few second mention of each sponsor.

Check them out in the description is the best way to support this podcast. We've got Notion for AI fueled note taking, Masterclass for learning, Shopify for selling stuff, AG1 for nutrition and Element for electrolytes. Choose wisely my friends. I'm doing these ad reads all in one place. So hopefully that makes it easy for you to skip them if you don't wanna listen to them, but I do try to make them interesting and personal,

often related to stuff I'm reading or thinking about. But if you do skip them, please still check out the sponsors. Sign up, get their stuff. I enjoy it, maybe you will too. Also, if you wanna get in touch with me for whatever reason, go to lexfreeman.com slash contact. There you can fill out a survey which gives me feedback or you can submit questions for an AMA or if you want to work with us, you can apply or if you just want to grab a coffee somewhere in the middle of nowhere as I travel the world.

All right, now onto the full ad reads. Let's go. This episode is brought to you by Notion, a note-taking and team collaboration tool. Obviously we talk a lot with Tensuini in this episode about the incorporation of sort of AI-like, semi-autonomous, human-in-a-loop type technology in the creative process and computer graphics process

in lighting the scene and lighting the human face, and bringing object in these worlds to life. I think it's true that a lot of that is ultimately about creating beautiful worlds, but I think the deeper thing in video games and movies is storytelling. I really think it boils down back to text. I generate, I don't know how many pages, probably 10 plus pages of notes a day, a lot. I'm a very bullet point, nested bullet points guy.

And a lot of that I use Notion for, and they incorporate AI really, really well into the note taking process, into the team collaboration process, project management process, really well into the note-taking process, into the team collaboration process, project management process, really nice. Try Notion AI for free when you go to notion.com slash Lex, that's all lowercase, notion.com slash Lex, to try the power of Notion AI today.

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Because these are not just teachers and instructors These are masters of their craft Many of the folks that have master class I've interviewed and it is a very fundamentally different Thing I think both are very useful. I think of a master class as a kind of Concise crisp preview of this human being's mind. And a three, four, five hour podcast is a kind of random walk through the edges, the details, the depths. Anyway, above all else, it's just inspiring to see these masters speak and get excited

about the thing they've mastered. Get unlimited access to every masterclass and get additional 15% off in annual membership at masterclass.com slash lexpod. That's masterclass.com slash lexpod. This episode is also brought to you by Shopify, a platform designed for anyone to sell anywhere with a great online store. I've used it to put up some shirts on, I think, LuxStreetMe.com slash store. So Metcalfe's law that I think comes up in this conversation states that the value of

a network scale is with the square of its connected users, n squared. Now, in some sense, it's a pretty simplistic graph theoretic concept, but it also happens to be a thing that explains a lot of the internet, that there is quite a lot of incredible value from scale. This applies for e-commerce, like with Shopify, it applies to social media. It applies to gaming ecosystems, like Tim talked about.

It's really interesting, the power of groups as you go from two people to three people to four people to five people with digital technology that removes the friction of physical communication, weird stuff emerges. Self emerges, revolutions, memes, ideas can spread virally, take over the whole world and then disappear the next day. It's so fascinating, there's dangers to that, but there's also a possibility of figuring some shit out at a human civilization level in that. Anyway, sign up for $1 per month trial period

at Shopify.com slash Lex. That's all per month trial period at Shopify.com slash Lex. That's all or case go to Shopify.com slash Lex. Take your business to the next level today. This episode is brought to you by EG1, an all-in-one daily drink to support better health and peak performance. This makes you think about the sheer complexity of the gut microbiome. Trillions of bacteria, fungi, and viruses influencing every aspect of the digestion, the immune system, the neurotransmitter production, the gut-brain connection, all of that. It's a well-oiled machine, but unlike a machine, everything is squishy. Everything is a robust, resilient mess,

not designed to be perfect and clean, designed to be distributed imperfect, but resilient and adaptable to whatever the hell you do to it. It's quite incredible. Anyway, AG1 will give you a one month supply of fish oil when you sign up at drinkag1.com slash Lex. This episode is brought to you by Element, my daily zero sugar and delicious electrolyte

mix. One of my favorite courses that I took, or a set of courses. I took neuroscience in college, and I also, I believe, took anatomy and physiology in high school, and also biology. Anytime any of those courses touch upon the nervous system, the neurobiology of the nervous system, the chemistry of the nervous system, is so fascinating. The way charge travels across a neuron, across the nerve cell membrane,

driven entirely by sodium and potassium ion flow through voltage gated channels. Those gates, both the pictures in biology in neuroscience books and the very concept itself that evolution developed it is just fascinating because that very mechanism at the chemical level at the biological level is the basis of thought. Think about that. Think about it. As you think about that, think about all the electrical signal traveling inside your

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Try to drink element.com slash Lex. This is the Lex Friedman podcast. To support it, please check out our sponsors in the description. And now, dear friends, here's Tim Sweeney. When did you first fall in love with computers and maybe with programming? I had a brother, Steve Sweeney, who's 16 years older than me. At some point when I was a little kid, he went off to work in California for a tech company and he'd gotten one of the first IBM PCs.

For one summer, I think I was about 11, I went to visit him in California. It was my first trip away from my family just to hang out with him. And he had this brand new IBM computer and I learned to program over the course of a few days in BASIC. I was just blown away with the capabilities of computers at the time.

It was unbelievable what they could accomplish and I was hooked from that point onward and very much wanted to be a programmer. Do you remember what you wrote in Basic? Is it a video game type thing? Is it like for loop, some numerical thing? Do you remember? Yeah, it's funny.

I have a perfectly vivid memory of all of the first things I learned to program. Okay. I have a hard time remembering people's names, but code really sticks with me. Every step and every challenge, there are lessons learned. Some of which I've come to realize were just like

me getting over some learning hurdles, but other things were actually shortcomings of programming languages. The realization that there are actually better ways and what a programmer is learning to program for the first time. A lot of what they're facing isn't the challenge of learning a new art, it's the friction introduced by failures of programming language design.

And so I've constantly come back to those early lessons there as I've progressed and done more and more things including building programming languages. Yeah, the friction and the pain is the guide to learning in programming. If I were to describe programming journey, that would be marked by pain. And that pain, you shouldn't escape the pain. The pain is instructive for you to understand programming languages.

But do you remember what kind of stuff you were writing at that time, just the early programs? Yeah, in the early days I wrote a little bit of everything. I wrote some games. The first game I wrote on the Apple II was since I only knew how to program in text mode, the computer would throw asterisks across the screen. They'd flow from left to right, and you'd have a parentheses

on the right-hand side of the screen. And it looked like a baseball mitt, and you're supposed to catch the asterisks. That was my very first game. It took about a couple hours to build and tune. And I went from there, but I built a lot of things. I built databases at different points. I built a programming language and a full compiler

for a language like Pascal, because I didn't know where you went to buy one of those. So I made my own. And one of the things of, one of the fun things of that time was bulletin boards. Before we had the internet in the hands of consumers, you used your modem and you dialed into a local phone number and

connected to whoever was running the computer there. Every town or city had hundreds of these bulletin boards run by different people with their own personalities and themes. I spent a lot of time building a bulletin board program and learning how to deal with database management and user interface and dealing with multiple users concurrently and things.

I probably found about 115,000 hours writing code just on my own as a kid between like age 10 and age 20 before I actually shipped a program to the outside world. Ten to 15,000 hours. What was the value of the hours as a kid you put in in programming that led to the success you've had in later life? Maybe this is by way of advice to younger people in terms of how they allocate the hours of their early life.

Yeah, you know, it's not just hours. It's really striving to learn, to understand what knowledge you have, what knowledge you lack, and to continually do experiments and work on projects that improve your knowledge base. I didn't do this with a great amount of structure or planning. I was rather just going from project to project, doing things that I thought would be fun and cool.

With each project, I learned new things. Learning about how to store and manage data, learning how to deal with advanced data structures, how to write complex programs that have deeply nested data and control flow. Each one of those provided a lesson, which were later essential. In 1991, I released my first game.

And over the course of that decade, we went from zero commercial releases to the first generation Unreal Engine. But this was largely just using the knowledge that I'd built up over the previous decade, just doing fun hobby projects. If I hadn't done all that work, there's no way I could have ever built the things that came later. All the experimentation and all the exploration, somehow contributed, somehow made sense later on.

All of that is integrated somehow in the stuff you build. It's funny how life works. The pieces come together eventually. Yeah. There are definitely karate good moments. Because all this time I was learning math in high school and in college, I studied mechanical engineering and so you learn all kinds of math, vector calculus and vector math and matrices and all these related fields, physics and stress and strain and how to deal with complex physical systems.

I wasn't really sure how engineers would actually make use of that knowledge. Do you just forget about it when you actually go off to do work, or do you write down equations on paper? It was actually not clear as an early engineering student what you do. But when I started writing the first generation on real engine and I was dealing with 3D math, I was like, wait, I know this stuff. I learned this. Suddenly suddenly like the karate kid,

you get to paint the fence and wax the car and suddenly put all the pieces together into a 3D engine based on whole lot of accumulated programming language and math knowledge. Often knowledge gained without ever anticipating that I might use it in that way. Also, I think what's useful is over and over learning a hard thing, and then showing to yourself that you can do it, that you can learn a hard thing.

So then when you come to having to write a 3D engine, that in ways that haven't been done before, you're like, I've been here. I've been here in this experience. and that in ways that haven't been done before, you're like, I've been here. I've been here in this experience. I don't know what to do, but we'll figure it out. We'll learn, I'll learn all the necessary components. So just not being afraid of something new.

That's right, and constantly striving to make connections between these fields and look for their applications. Long after I chipped on Unreal Engine, it was like going back through an engineering textbook and looking at, oh yeah, I use that, I use that, I use that. And then I got to this section on eigenvalues. I'm like, I don't know what the hell this is. But it turns out eigenvectors and eigenvalues

were the critical breakthrough that made the Google search engine technology work and stand apart from the rest. Because they found if you threw all of the links that exist in the web and links from and to different sites and you put them in a giant matrix and you conclude that you found the dominant eigenvalues, then those eigenvectors described the best search results for different things. And so constantly picking up knowledge and looking for ways to put it together is the thing to do. And if you aspire to be a programmer,

you've got to write a lot of code and you've got to continually learn new things and improve. If you want to be an artist, you've got to continually draw artwork, all styles and all kinds and constantly push yourself to learn more and more. Because you never know exactly what you're going to end up doing in the long run. But the more knowledge you have and the more skills, the more chance you have putting it together and being successful.

And whether you're a programmer or an artist, you should probably take linear algebra, even though it doesn't make sense at the time. I found getting an engineering degree and then never working in an engineering field, just being a computer programmer was immensely valuable. I went to University of Maryland, which for some disciplines it's known as a party school, but they work the engineers to death. Worked really hard and if you learn any engineering discipline, you learn massive amounts of math and you learn the rigor of problem solving.

Not just what you find from the Wikipedia article, but going through all the exercises of solving complex problems and building up series of solutions to derive an answer, it's valuable and it embodies the knowledge that you need as a programmer. People often go to university and think, okay, my goal here is to get good grades, so I get a diploma and I prove to an employer they're invaluable. No, that's just the superficial bookkeeping of the university.

The real purpose of all of this is to learn. Whether you learn formally or you learn on your own, of the university. The real purpose of all of this is to learn. And whether you learn formally or you learn on your own, it's the learnings that are really valuable in a career. And especially if you're going to be entrepreneur, it's really knowing the stuff that matters and not having the diplomas. There's ever more pressure to make a build rebuild society more and more around credentials. Do you have this certificate? Do you have that proof? But companies that are focused on just building great products and doing great things,

gravitate towards people who do the great work. Yeah, one of the great things about youth is there's more freedom. There's just more time to learn. People, when they go to high school, they sometimes think, why, I can't wait to get out of this and be an adult and be free. But it's not quite freedom.

When you get a job, you start a family, all wonderful things, you get more and more busy and less and less time to learn in the general sense. Learn whatever the hell you want. And that is a wonderful time in life. The teenage years, the early 20s, the general sense, learn whatever the hell you want. That is a wonderful time in life, the teenage years, the early 20s, the 20s, when you could just learn random shit. Yeah, you know, I think this is something

that's kind of changing in America. There's so much focus on grades and homework and structure around kids' lives. You know, when I was growing up, my mom would feed me and my neighbors, you up, my neighbors and moms would feed them breakfast and they'd be like, well, be back by dark. We'd go out and we'd play and we'd do all sorts of things. We'd explore the woods. We'd build go-karts. We'd salvage old pieces of electronics and build what we thought were our spacecraft control panels for the, you

know, fake spaceships we were building as play. And we'd have an enormous amount of freedom. And you know, from basically being a little kid through the time I went off to college, it had an enormous amount of free time. Some people just used that and wasted it and watched TV. Some people socialized. And some people really got into serious projects. So many people at all times were doing cool things. I was programming, I was learning to build things.

Before I was releasing games to the world, I'd be having neighborhood folks over to play the things I was working on and check them out. Sometimes they're impressed and sometimes they weren't. They'd have their own projects and often we'd have spare time jobs and everybody was entrepreneurial. Everybody had a side gig. Sometimes you'd go around and mow people's lawns or you'd rake the leaves up and earn money. The freedom there and the organic learning that occurred there, I think is something that is really critical to the American experience.

I worry as increasingly going away as society is ever more protective and sheltering, and makes it harder to get these experiences. So on the video game side, when did you first fall in love with video games? I've had a funny relationship with games because my real aspiration has always been to program cool stuff.

I get more enjoyment of programming than anything else in the world. And so, you know, my first really too formative experience with games were playing this game called Adventure for the Atari 2600. It was like, you move this dot around the screen and picked up objects like swords and fought dragons and invaded castles and solve puzzles. It was very, very simple iconic stuff rather than realistic graphics. Then the other game that really got immersed in was Zork, which was a text adventure game.

It would tell you where you are and what you see and you type in commands like go north or pick up sword or open door and explore a world that way. So the game didn't have any graphics, but in your mind you had this elaborate picture of what you're seeing there. And it really brought in inspired imagination or than other things. And playing those games led me to go off

and learn to program everything I saw there. And that drove a lot of my programming. I learned how to move a player around the screen. I learned how to build a design tool so I could build castles, and save them often, and play them in a game. I realized there was a separation between the tools that you use to build a game and the game itself, and the more powerful tools you had,

the more creativity you could unleash in yourself or others. I learned all the programming techniques that supported games, how to parse text, pick up sword and go north. How do you make that sentence into an actual series of commands on the computer? That was really, really exciting. I have to say, until the time that Fortnite came out, I played video games primarily to learn what they were doing,

so I could go off and do it myself. I'd sit down, you know, when Wolfenstein came out and then Doom came out, I'd go through and look at it pixel by pixel. I'd move the mouse very slightly and look at exactly what was happening to figure out what technique was being used there. That was a puzzle solving at grand scale and it was so fun. So take me there in the early 90s. So you launched Epic Games in 1991. So you're the writing of your first big video game, ZZT. What was it like? What was the technical challenges?

What were the psychological challenges of building that? It was a funny project because I didn't start out to build a video game. I just moved from an Apple II that, so my brother bought my family an Apple II right after I'd visited him in California. So I'd been programming on that for a few years, learned a lot of techniques, but weren't many Apple II users around still by the time that cycle came to an end. I just gotten an IBM PC of my own. I was learning to program and I realized I needed a text editor. So I started writing a text editor. A text editor is a program to edit text files. You have logic to move the cursor around and let people type things and backspace,

and delete, and do all those mundane actions. One night, I finished it up and I was like, well, okay, I have a text editor but this is pretty boring. So I made the cursor into a smiley face character and I had the different characters you could place in this document, perform different gameplay actions. Some would be walls and some would kill you and some would be moving objects that could fly around the screen.

So this text editor I made evolved into a little game editor, so I was building these levels for a game. I put a lot of time into building an editor and a primitive set of objects, about 20 or 30 different objects, enough to build a really cool and compelling game, but not so many that players would lose track of what they're seeing. I started off just building different game levels.

The idea is you'd be on a series of boards. They'd be connected by going north, back at the end of the current board would take you to a new one if it was open or maybe it was blocked and you couldn't go there. I built the sole game world around that and this was the game that became ZCT. I was having fun with it, building it and playing it, but I didn't know if it would really work. I did this experiment.

I started inviting neighbors over, like some adults, some kids of all different ages, and I sat them down from it and say, here's a game I made, figure it out. Yeah. I did force myself not to tell them what they need to do, because I really wanted to learn if they were able to discover it all for themselves.

Today we would call this user experience test, and there's a whole field of research around user experience research, but back then it was just inviting some kids over to play the game. I took notes about what they got stuck on and what they enjoyed and where they felt bored, and just iteratively polished the game until I felt it was good. I put it out and released it on, this was before the Internet,

so there were board and boards. I upload it to a bunch of local bulletin boards. From there, it started spreading, because the way to build up cred for bulletin board users was to upload new files and to claim that, hey, I was the first that brought this to you. And so there was a natural tendency of the software to spread. I decided to use the shareware model. So I didn't just build this one game,

I built a trilogy of three games. I released the first one for free and I said, hey, if you like this, buy the two sequels. I included my parents mailing address and said, send us $30 and you can get the sequels to this game. The check started coming in within a few days. I was making like getting three or four orders a day, I was making like $100 a day.

I'm like, woo, I'm rich. Because being a 20-year-old, that was a pretty big deal. What did that feel like, just getting money and probably feeling this immense success from something you've created? Well, I looked at money always just as a tool to help you fund accomplishing cool things.

Having enough to do the things you want to do is the critical thing. Money always just as a tool to help you fund accomplishing cool things. Having enough to do the things you want to do is the critical thing. It's always been just very utilitarian. But the knowledge that other people all around the country and then a month later all around the world were playing the game, that was mind-boggling. Me like this little kid who'd put out a game on a local bulletin board, could be doing international business and shipping disks all over the world to players, because the software is spreading on its own. It's just magical.

That was a new thing for software. That did not happen with mechanical devices. You manufactured one, you sold it to somebody and they had it and that was it. But software could spread. That was just really cool to see and it made me realize there's really no upward limit on the peninsual for a business like that. We saw Microsoft as a big juggernaut company at the time, but I was like, hey, if Epic does games good enough, we could accomplish what they've accomplished with operating systems.

And the sky was the limit. I think this is the age we live in now. You don't have to be an industrialist manufacturing physical products. Anybody who builds anything digitally, if it's good enough, you can reach the entire world and build the next Microsoft or Meta or Apple or Google or Epic Games. It's such a cool origin story though. You start out building a text editor.

So you're looking at this project, you're playing around with it, you're building a text editor. So you're looking at this project, you're playing around with it, you're building up the tools. It's just an inspiring moment because a lot of us start out building a project and to allow yourself to see the potential pivots, the potential trajectories that can go is really nice. To sit back, allow yourself to be bored,

and like, ah, I'm gonna go this way. I mean, that's like a crossroads. You came to a crossroads, I mean, you built compilers, you design your own programming language, you build compilers, databases, all these things you mentioned, and you started building a text editor. And then here it came to this crossroad,

I'm gonna make this fun. And then from there, one of the most legendary gaming companies was created. It's kind of cool, like that's an inspiring thing for sort of developers, like be open to the possibility of creating something you didn't plan to create and just go with it, right? That's cool.

Yeah, and it was a bunch of learnings emerged really quickly there. The neat thing I did with ZZT was I didn't just release the game, I also released the editor with it. I built this tool so I could make these ZZT boards that people could play, but I also gave it to all of the players themselves. You know, like 30 years later, I still run into people. When I go to a game industry event, it was like, I grew up playing ZZT. And here's an adult who grew up playing my game.

And it was because it enabled anybody to become a creator, too. It had this little board editor, and it also had a little scripting language so you could learn a little bit of programming in it, too. And it kind of impressed. And it really set a formative principle of Epic, which was that, you know, the company's mission is to make awesome entertainment,

but also awesome tools, and to share those tools with everybody so that they can build their own amazing things too. And, you know, when we got into Unreal Engine a few years later, the interplay between us building a game and us building tools that were widely used by others was a critical part of that.

And I think that's the sole reason that Epic has been massively successful. And actually, the reason that we've survived all of this time is that by serving both creators and gamers, we've been able to weather the ups and downs of the game industry. It's a brutal place for companies. We've been able to survive every financial downturn and sometimes the engine's been funding the business because we didn't have a game and sometimes the games have been funding the business

and it really set a principle in our culture that's persevered and is continually brought to their forefront. But on the editor front, that's such a fascinating philosophy that you always allow people to create their own worlds. You have an engine from which you simulate the world that the game is in, you have the actual game,

and you also have the freedom for creators to create various Fortnite islands of their own. So it's like with everything you ship, that freedom to create is always there. That's really interesting. Yeah. It's something we aim to do more and more fully over time. In the course of building Fortnite, we've got a lot of other tools that are useful for us too.

It's not just a game powered by Unreal Engine, but it's also a social ecosystem where people can make friends and voice chat and get together and party. So we've opened up all of those social features into Epic Online Services. And we give them away to all developers for free because we all benefit from growth and that user base. And our goal is ultimately to build the company's products

on the same technology that we share with everybody else and to help that foster a bigger and bigger ecosystem over time where everybody benefits. If we could just linger on the 90s. So you said bulletin boards. Maybe you can explain what that's like and also explain the birth of the internet, what that was like. What was the internet like in the 90s? So the internet is a funny thing. It started out as this Defense Department research project called the ARPANET,

the Advanced Research Project Agency Network. It's like this revered secret thing. They became more and more open as they connected universities. Universities connected to the Internet in the mid-1980s. So if you were at a prestigious institution with access to computers, you could get on there. But the consumer back then, we just had these modems. This thing you plug into your phone line, and it dials up on a phone number and then

sends wild sound effects over the telephone line to send digital signals back and forth. And these were really slow. The first modem I had was 300 boards. That means 30 characters per second of data. So you're sitting there watching a sentence slowly emerge character by character as you're going online. But that's how we got online and we talked with each other. So you dial up to a local bulletin board.

It'll be run by a person. Usually they have a computer or two sitting in their kitchen or something that's running the bulletin board. They have a small community of a few hundred users, all competing to connect to that one phone line. It was often busy and you couldn't get in. The more popular bulletin boards were harder to get to. Nice.

We had all kinds of communities develop. You could see there was the programming communities where people talked about programming. There was the news and events community. I lived in the outskirts of Washington, DC, so that was a big thing. But then there was the pirate community where they're sharing pirated Apple II games and very different community ethos and mantras out there, but all really nice and also very small. These things, these wooden boards couldn't grow to the size of Facebook because your phone line couldn't take that many calls. And then later in the 1990s, the

internet, which had been fostered in these colleges, started opening up to the public and anybody could connect to it. And suddenly the world took on a life of its own. It became much, much easier to reach a global audience faster. And you would start shipping games to the internet, which is a bit of a crazy thing to do. Because you're supposed to have like a physical copy, but to post on the internet is pretty innovative. Even shareware is pretty innovative. Yeah, it's been a funny transition for the game business. Epic started out making shareware games distributed digitally.

But as the first 3D games took off, like Wolfenstein and Doom from id Software and then Unreal from us took off, you know, to reach a huge audience of millions of users, we had to go into retail stores. So we worked with a retail publisher and they made a box and they put CD-ROMs in the box. And then the world started transitioning back to digitally. And that transition didn't start well, right? The initial transition of gaming to digital was all but torrent, all piracy. And the other horror stories about games that would sell like

a 100,000 copies but have 2 million users because most people pirated it. And then, you know, Steam came along and introduced digital distribution and made digital distribution of legit games so convenient that most players moved away from piracy towards that. And, you know, their practices were then followed by others and the early digital industry took form. Yeah, it's fascinating. I mean, pirates do lead the way for innovation.

The same as the story of Spotify. You basically, I think most people, when they derive value from things like video games, want to pay for those video games. They just want it to be easy. And so that, the same thing with music with Spotify. But maybe just staying on the 90s, there are gonna be a lot of indie game developers

who will listen to us talking today. Can you go back to that mindset and try to derive some wisdom and advice to those folks when you were just a solo developer, maybe just a small group of people creating your early games that eventually became this huge gaming company, but in the early days, what were you going through?

What were the ups and downs? What did it take to stay strong and persevere? Well, one of the critical things that Epic always worked hard to do was to make something different that nobody else was doing and to try to satisfy a small audience rather than competing globally with the game juggernauts. Back in the 1990s, Epic was new, but Electronic Arts and Activision and the other big publishers had been around for a decade and they were huge companies.

It had giant retail distribution networks. If I tried to make a game and then convince them to publish it, I doubt I could have had a chance and I doubt that even if I made a successful game that I would have made much money from it though they might have. So the really unique angle to Epic then was shareware. That was just the idea that if we distribute our game differently, then we can reach a much larger audience than these bigger competitors by virtue of this first episode of the game being free. It was the advent of what later became free to play.

The logic of that is just as true now as it was then. If the thing is free and anybody can get into it, then it's spread from friend to friend as people bring their real-world friends into the games they're playing, and have the opportunity to build up a community around that. So the other lesson there was minimize the friction of people getting into your game, make it easy to get into and make it fun.

I think the other, well, I was very fortunate. ZZT was a funny game. It was not much like any other game. It had much worse graphics because it was all just text characters, smiley faces, and other Greek letters, and things participating in this game simulation. They were iconic representations of characters rather than real ones. This was decades into the age of

real graphical games with interesting graphics. So it wasn't even trying to compete in that area, but it was able to compete in a different area, decades into the age of real graphical games with interesting graphics. So it wasn't even trying to compete in that area, but it was able to compete in a different area, which is that it wasn't just the three games I'd made and shipped as a trilogy that were successful and drove the success of the product. It was the fact that I released in editor and there's a whole community around it. You see that trend is repeated itself.

Like there was ZZT was on it. Before that, there was Bill Budge's Pinball Construction Set. That was a 1980s Apple game that let users build their own pinball tables. Since then, you've had some of the world's most successful games follow that path, like Minecraft, you can build your own stuff, Roblox, Fortnite Creative,

and Unreal Editor for Fortnite. Games that become platforms for other people to build stuff was a real opportunity. I think the big thing to realize, as for indie developers right now, is there's massive, massive competition in every major genre. And it's very unlikely that unless you just

happen to be the world's best at a particular thing, that you're going to release a game in an existing, highly competitive genre and win. A much better chance of success is in releasing something that hasn't been done before, being really unique and reaching an audience, even if big or medium size or small, reaching an audience and becoming really popular with that. Making some money from it and being able to reinvest and then expand towards your ultimate dream. I think the one-shot go-from idea to

commercial success at massive scale is a lot less likely than the multi-step process of continually build better and better stuff over time until you get into a position of excellence. Constantly try to do something that others aren't doing. Yeah, that's right. Because if you look at every market, there's a few markets where the current leader came late to the space, usually because the prior leader failed so horribly. But most of the time, the company that's succeeding and winning in a market is the first or second entrant there. They've just continually buoyed their success. Great advice and fascinating.

But on a human level, was it lonely? Was it scary? You sitting there as a developer? I'd say it was the opposite of lonely because, the thing that spurred me to actually release this was seeing kids playing the game in my neighborhood and having fun. I mean, like, this is really good. And seeing them enjoying it and laughing and pointing at the screen and getting together and just wanting to play more.

That's awesome. And the human element was always pervasive, you know, because I did not only receive orders, but people would actually write letters. We wrote letters back then in the 1990s. People would say how much they were enjoying the game and how their kids were playing the game and so on and so on. So, you know, we felt very connected. And, you know, I think a lot of businesses have to make scary decisions because you're spending, you know, potentially all of the money you have to take a shot at something that you're not sure will succeed. I was very fortunate starting a business like this

because it didn't really need any capital. The capital was, well, the several thousand dollars in computers I bought by mowing lawns. It wasn't much risk if that hadn't succeeded. I guess I could have figured out how people get mechanical engineering jobs and pursued that. But once it took off and once the orders started coming in, and people started writing letters saying

they're enjoying the game, I knew I was gonna go all out and try to build a company there and succeed. And that was like gonna be my big goal. So I'm sure people know, but Epic Games was created in 1991 and went on to transform the gaming industry several times, one of which is Unreal Engine. So let's talk through the origin story of that. You said that when Wolfenstein and Doom came out, that changed everything.

So take me to that moment. Yeah, that was a very interesting time. Epic had, after my first couple of games that had recruited developers, you know, usually college students, high school students who are just working on their own had real skills but didn't have an outlet for their work. Epic had been matchmaking the best artists and programmers together from all over the world. Like Chaz Jackrabbit was, Cliff Belouzinski, a high school kid in California had made a really cool adventure game together with Ariane

Brucie, a demo coder from Holland who would make amazing graphical stuff and built a 2D game engine. And it connected them together and a musician, Robert Allen in California. And they, you know, by telephone and modem and so on, we were building these little 2D games and having quite a lot of success. You know, there are a bunch of people making thousands of dollars a month while they were still students in royalties from the games that Epic was producing and by coordinating people with people and publishing through shareware. That was all going great. The company had a little office and we were copying floppy disks and mailing them out. When Wolfenstein

came out, we realized the future of gaming is going to be 3D. There had been a lot of experiments in 3D before that hadn't been great. There were 2D, there were 3D renderings of mazes that were not in real time, and you were always looking north, south, east, or west. And then there were vector graphics with little wireframes moving around and things.

But Wolfenstein was the first game that was fast enough, running at 30 frames per second, it really felt immersive. It felt like you were there, like you were in this castle Wolfenstein fighting Nazis. And that was a really amazing and immersive experience. 3D graphics were pretty primitive then. It software followed shockingly fast with Doom, which was much, much more capable 3D engine, which had stairs and though it was still what we call 2.5D, it was environments that were very realistic,

textures that were very realistic, form of lighting that was approximate, but incredibly realistic and such great artistry and sound effects, it filled completely visceral and real. You might look at it today from our point of view of a modern game player with 20 teraflops of computing power in your device and say,

oh, that's not very impressive, but it was amazing at the time. I mean, for me, just decided to pause on that. I think Wolfenstein was one of the most amazing moments of my own life. Just being able to, like you said, in real time, move about a three-dimensional world. I just remember just moving around,

just in like, what is that feeling like? I mean, you feel transported into another world. You feel that you're there, yeah. Especially when you turn the lights down in your room and you turn the sound up on your speakers and it will scare you. And you'll feel like that fireball that's coming at you is gonna kill you.

That was an amazing time because we hadn't experienced that before. There was nothing like that. You'd watch a movie, a scary movie or whatever. It's just this thing that was happening. This was you in a 3D world. So how did that change Epic? This realization that the future of gaming is going to be 3D.

Well, at first I was really depressed. I think the wizardry of Doom especially was so incredible that I gave up on programming for like six months. I was like, I don't know if we'll be able to compete with this. I have no idea what we're gonna do. We just keep making 3D, 2D games and hope that the business goes on. But that was the nature of CarMax Wizardry.

He had done things that were like, not just one innovation leap ahead, but a dozen simultaneously, interplaying in a way that you couldn't pick them apart into their component pieces. But funny thing happened, Michael Abrash, long-timer in computer graphics, wrote a book on the techniques for 3D graphics and texture mapping.

He wrote some articles in one of the programming magazines of the day and explained it, and showed assembly code to do texture mapping, drawing these 3D graphics on the screen. It was actually really simple stuff. I was like, oh, I can do that. A bunch of us at Epic independently went off and wrote or started writing our own 3D graphics code to figure it out.

We found at one point we had a number of people dabbling in this, doing different parts of it. And at that point we decided, OK, this is 3D graphics and 3D gaming is going to completely change the world. We need to go all in on this. And so we took the best people from our best 2D game development teams and put them all together to make a 3D game. We didn't really know what we were doing at the time.

None of us had ever shipped a 3D game, and most of us were still learning, but everybody was trying different disciplines to see what they were best at. It was a combination of a bunch of people who came together to make Unreal. I'd initially volunteered to make the 3D editor for the thing, and James Schmotz had made Epic Pinball.

Epic Pinball, now that wasn't a crazy game. This was one of the 2D share games. He made it while he was in college and he was making like $30,000 a month from the royalties from this game. Because everybody had wanted an awesome pinball game, massively successful. But he was a multi-disciplinary person. He wrote the code for the game,

the art for the game, and did basically everything. The code was 30,000 lines of assembly language. And so he was initially going to write the 3D engine. I was going to write the editor and he sent me his code so I could integrate into the editor. It was like this giant pile of assembly code. I was like, hmm, why don't I just write this myself? And so James instead started going off and building 3D models and 3D animations using the tools at the time. Cliff had done a lot of design work and built the levels on Jazz Jacket when often started learning basics of level design.

So I was writing this editor and Cliff Blizinski was customer number one for it. Starting to go off and build levels and James Schmotz was building awesome creatures, sending them to me, I'd get them implemented in game. We brought in an animator to bring them into life and we brought in more and more people until at the peak of Unreal 1 development, we had about 20 people working on it,

which was a huge team for the time and it was really stretching Epic's finances nearly to the breaking point. We barely survived and almost ran out of money a number of times, but somehow we always pulled through. It was a crazy project because it was three and a half years of development in a game that we always thought was six months from shipping. It was three and a half years of 70 or 80 hour weeks

for most everybody working on the project. Not even knowing what problems we'd need to solve next because we were so immersed in the current ones. Were there moments when you were losing hope that this might take too long and the company will run out of money? We were always very financially stressed. So I was continually worried about that. I had total confidence that we'd work out all the technical and

artistic problems because we knew the pieces and it was largely a matter of typing code in and solving some problems. And kind of like we knew we could ship a version of it. And the thing that was continually really interesting was the ongoing discovery of new techniques as we went, you know, because at the time Quake had shipped, it had a little bit of dynamic lighting. Unreal really pushed dynamic lighting much higher than anybody else had done before. Then colored dynamic lights with some shadow casting

capabilities statically or moving lights without shadows and figured out how to do volumetric fog. So you could have foggy areas that were full of lights, and you get the glow of the lights standing out in the fog, and affecting the appearance of the level. A whole lot of amazing techniques came together to build a game. It made a number of leaps ahead of the state of the art at the time. It was really crazy, but I think most companies wouldn't have survived that, but

the sheer talent of the people involved made it possible. Epic has often done things that most companies will have failed at, and we succeed not because of awesome management or awesome planning or awesome financing, but because of the sheer talent and willpower of the people involved to make it happen. What about the interdisciplinary aspect of it? Like you said, artists, engineers, programmers, designers, all of them working together. What was that, the 20 people, what was the dynamic there like working in saying hours?

What was it like to make a team like that work together well as an orchestra to actually deliver the game? Yeah, that's one of the really unique things existing in gaming, not in normal big tech companies, which are just engineering and business driven. But gaming really does require all the best people across all the creative disciplines working together. Epic could grow organically by recruiting people with awesome talent.

We always had a limited budget. We could never pay to bid up people's salaries and hire them away by paying them more. We just had to find awesome people who were at the beginning of their career and put them together. And so everybody was very new to this and didn't have any assumptions about how companies worked. And so you know you put all these people together and you know that it was really a constant interplay of talent as people were learning how to work together as a team. Nobody had management experience. Most people hadn't shipped a game before they worked with Epic. And we were figuring out as we went.

But it was a constant iterative cycle. We'd make several new versions of the game every day. Read a new compile, introduce a new feature, or fix some bugs, get the artists, artists, improve their levels, continue building stuff, and then we see what they're doing in their levels, like, ah, I see what you need now. We'd constantly be improving the tools and just the iterative process and the speed at which that improves products is the critical element to success in games. The slower the iteration cycle, if you make a build every week and you prove you go through one iteration every week, you're

gonna be way, way, way worse by the end of your project than a game company that makes, you know, new stuff every day. And that was the magic that happened together. And it wasn't, there was really nothing but passion and everybody's individual dedication to it that made it work. I heard you still program, but how much programming were you doing back then?

You mentioned hours, probably insane hours. So like it'd be almost fun to talk about your setup. What a day in the life of Tim Sweeney in the 90s when you're building Unreal look like. Well, we'd all gravitated towards a schedule, a work schedule that maximized productivity. And that usually meant waking up late, I get to like usually get to work around noon.

I usually work till like 2 AM or so, 3 AM sometimes. I didn't have anything else going on in my life. So usually, I just work and sleep and occasional eating. I found I always need eight or nine hours of sleep at night. Without good sleep, I would just become a zombie and wouldn't be nearly at my best. I always needed to get sleep, but I didn't need anything else going on. The programming itself was so energizing and drawing.

It was three and a half years of that during the project. Mostly spent programming, I'd say probably 60 hours a week of programming, five hours a week of coordinating with other people and iterating and sitting down with them and looking at what's going on in screen and figuring out what they needed, maybe five hours of business stuff. There's a good division at Labor then. They didn't have a big executive team,

but it was basically myself running the technical and development part of the company and Mark Raine, running the business part of it, doing deals and maxing out his credit card and going around the world, bringing in sources of revenue to keep the company funded. What programming language are we talking about? C, because you mentioned there's this pile of assembly.

Did you choose, what was your decision in choosing the programming language that would, that Unreal Engine would be written in? I'd grown up learning with Pascal as my favorite language. In order to just get maximum performance and get the latest operating system features, I had to move to C for my second game, Joel of the Jungle, a little Nintendo-style platformer.

And so when I started Unreal Engine, it was on 16-bit Windows using the C programming language. And over the course of the first year, it moved to 32-bit using these DOS extenders and then using Windows NT. And I moved to the C++ language. And just because it simplified the code so much, went from a really complicated pile of code

to a much simpler one, making that transition. And so almost the entirety of Unreal Engine development, about two and a half years of it, was all on C++, 32-bit. Completely state of the art then. Like 32-bit protected mode was kind of a magical thing, having come from the days when computers were much less reliable and crashed all the time. Yeah, and turned out to be a pretty good bet because C++ out of all those

languages ended up being the dominant performance oriented language that survives to this day. Yeah. It's because it solves all the problems at scale, often through manual pain, but always solves them and a lot of other languages do better a lot of like theoretical aspects and are better for some usage cases but you can't do everything and that's that's really very limiting. Alright so ridiculous questions but like did you have one monitor, two monitors?

Were you picking on the keyboard? Were you picking on the chair? What are we talking about? Let's paint a picture. Okay. I went through a big transition there. So I started out being pretty lazy. I'd had a bunch of like, I bought used computers because you'd often get them at half the price of a new one, maybe good enough.

So I had this old 486 I was developing on. I guess it was a 15-inch monitor at the time. It was a poor workstation setup, but it was very economical. And so as we started on Unreal, I realized that I had to write a ton of code. I had to write at absolute maximum productivity. So I had to rearrange my entire life around delivering maximum output. And so at that point, I realized actually spending money on getting good equipment was a good investment.

We're not talking about millions of dollars here, or billions if you're building a GPU farm, we're just talking about buying some basic hardware. I bought the biggest CRT you could buy at the time, because this was a CRT year. It was 24 inches. It weighed like 100 pounds. I had back pain for a week after I installed it. But it got me a 1920 by 1200 view in 1996.

In 1996, that was pretty cool. So I'd upgraded to a 90 megahertz Pentium and did a lot of programming on that. It was on the 90 megahertz. These were the main consumer computers at the time. And I'd optimized the Unreal Engine software render on that, which was, you know, the Pentium was the first superscalar architecture

in consumer computing. It could run up to two instructions at a time. And if you wrote your assembly code very carefully, you could get absolute maximum throughput. So I'd gotten my texture mapping code down to six CPU cycles, comprising 11 instructions. And that was required for every pixel on the screen. That was just enough performance to deliver that.

But Dell came out with these new workstations, and Intel had just launched the Pentium Pro, the first out of order processor. And so I basically bought the absolute maximum configuration that money can buy. It cost $7,000. I had a gigabyte of memory in 1996. Wow.

And a 200 megahertz CPU. So it tripled the speed of compiles and just made me massively more productive. So that's why I was using throughout Unreal Engine development and shipped with that. By the way, people in the 90s would have been blown away by this workstation. I love it. Yeah. Were you in writing, were you considering the hardware much?

Was there a sense like so, you know, for people who don't know Unreal Engine rendering, I guess is all software doesn't use the hardware. But were you trying to optimize, as I understand, maybe you can correct me. But like, were you trying to optimize, as I understand, maybe you can correct me, but were you trying to optimize to the hardware at all? Well, at the time, so we did most on real engine development before the first real GPUs came out. And the 3DFX Voodoo one, the first GPU

that actually delivered serious performance compared to software rendering, the first GPU that was really gainful came in the end of the development, and we supported it really quickly, but it was not the target all along. And so development was focused on just building. There are two parts of the engine, right? There's all of the gameplay systems

that manage the simulation and physics and so on. That's all written in very high level C++ code. And maintainability is as much of a goal as performance, because we had to build massive amounts of systems over time. But the one thing that was really a bottleneck was graphics. The cost of rendering a single pixel was really high, and so you had to do everything you possibly could to optimize the rendering of pixels on screen.

And so we were talking about how many CPU cycles. When you say your CPU runs at a gigahertz or whatever, that's a billion instructions per second. How many instructions do you need to run to get a pixel on screen? So there's a constant challenge to optimize that down. There was also a competition among all of the graphics programmers who often send emails You know like bragging to each other about what new technique they've discovered

you know to try to get the cost down and a brash has original articles took like 12 CPU cycles to render a pixel and you know everybody else had figured out how to get to like down to six or sometimes even four cycles and That involved lots of different trade-offs of caching and memory hierarchy and so on. It was just like a magical time where a human could actually understand exactly what the CPU was doing under the hood and could write code that exactly targeted that. And that's largely lost now. When we talk about optimization software now, it's largely about heuristics and statistically, this memory access is likely to hit the cache.

This algorithm is faster than that algorithm. Because CPUs now have such advanced out-of-order execution, you really can't micromanage what's happening on an instruction by instruction basis. You can only manage the aggregate performance of code. So there's this lost art. Some people miss it, some people don't, in which the programmer had absolute control

over the machine and could work miracles in special cases if you tried. It seems like there's still value to that art when it comes to GPUs and ASICs. So basically trying to understand the nuances of the hardware and how to truly optimize it, whether it's for machine learning applications or for ultra realistic real-time graphics applications. Is that true?

Yeah, that's absolutely so. The optimization problems have just moved around. In a system like Nanite, the virtualized micropolygon geometry system that Brian Karas, a brilliant engineer with Epic, built was just one of those multi-year optimization efforts that required him understanding everything from the highest levels to the lowest levels of the hardware

to figure out how to make this breakthrough technique work in a way that was actually maximally performant on GPUs. And so Nanai is the system we'll jump around in time that takes us to today with Unreal Engine 5. This is the system that does the geometry. Yeah. So rendering the world sort of geometric. There's many layers to this.

We'll probably talk, sneak up to each of those, but one, you have to actually create the geometry of the world around you and do that in real time and really efficiently. There's a bunch of different ways to optimize that. Can you just speak to it? Yeah, you know, with the advanced art tools we have today, it's really easy to create a scene

with billions of polygons. The hard part is how to render it efficiently, because you can't render billions of polygons in a frame. Basically, you want to render an image that's indistinguishable from the full detailed geometry if you rendered it at ridiculous cost. And so the challenge is how to simplify every component of the rendering, you know, the geometry, the lighting and so on down to real-time techniques. They're efficient. They capture a realistic view of what's around you. And so when an object is up close to you, you want to render it with a lot more polygons than when it's far away. But one of the cool principles of mathematics is the Nyquist sampling theorem. It says if you're trying to reconstruct a signal, there's a limit to the amount of data you need to bother capturing.

If you want to render a texture at a certain resolution, then you never need more than twice the pixels in the texture that you have on the screen. That's called the Nyquist limit. One of the challenges of computer graphics is given the need to render objects at extreme close-up distances and extreme far away distances. You always want to be able to generate the right amount of geometry so that you have enough to be indistinguishable from reality, but not any more than necessary.

And with geometry, the idea is that if you render two triangles per pixel, you should get an image that is indistinguishable from thousands of triangles per pixel. But if you render less than two triangles per pixel, you're going to start to see visible artifacts of the loss. And GPUs have this amazing hardware in a lot of different pipelines, but it's all very fixed function.

There's pixel shader hardware, there's geometry processing hardware, and then there's triangle rasterization hardware. One of the limits of GPUs is that the triangle rasterizers are built for pretty large triangles. If you're building a triangle or rendering a triangle with 10 pixels, that's pretty efficient. But if you're building or rendering a triangle with one pixel, it's very inefficient. So one of the breakthroughs Brian made was to design an entire pipeline for avoiding

the rasterization hardware in the GPU and just going straight to pixels and calculating what should be done with that pixel as a result of some ray tracing and Geometry Intersection calculations done in a pixel shader. So instead of using the triangle pipeline, we're just using pixel pipeline and Getting a better result because of the limitations of the triangle rasterizer in the GPUs. That's fascinating because as you described you need the tiny triangles for the detail, for the stuff that's up close. I mean, this might seem obvious to people, but it's not just stuff up close.

It's like, it depends where you're looking. Like the human eye and the human focus and the human attention mechanism defines how much detail you want to show. Because the thing that the human is likely to be giving attention to, you want that to be super high resolution. Everything else, including due to distance, can have less geometry and less texture, less information in it. Yeah, that's right. But there's a lot of challenges like that.

It turns out it's a lot easier to render one frame that looks perfect than it is to render a series of frames in motion that look perfect. A lot of the problems with the earlier algorithms, they aspire to do this sort of things with what's popping. You'd be running some number of triangles for a while, and then you switch to a different number of triangles, and you'd see a visible transition, and the screen would look like it got shaken up.

It's a disturbing artifact that distracts you from the game. So one of the magical trade-offs of Nanite was how to avoid all the visible transitions and get them down to a point where, though they exist statistically, they're not really perceptible to a person looking at it. You look at something like that night, I mean, there's a nice blog post, there's nice descriptions about the details,

but you can tell even under the details, there's just incredible engineering that goes on. It's so cool. It's so cool how underneath this, the actual experience of beautiful detailed scenery, there's just incredible engineering to bring to you simulation, the actual experience of beautiful detailed scenery. There's just incredible engineering to bring to you simulation, ultra realistic simulation of reality in real time, like lights changing everything.

And then it just takes you back to that feeling I had with Wolfenstein, but like more. And you can completely lose yourself in that world and you would forget that this real world exists. What is the real world anyway? That coupling of great engineering and great storytelling in terms of just feeling is super cool. It's great to know.

It's great to know that there's these teams behind it. It's cool that you're also releasing a bunch of details around it, at least for folks like me, it's inspiring to see. So Unreal Engine is this fascinating creation. It's a big, bold, crazy bet that you've made. Maybe it's good to actually explain what Unreal Engine is for people sort of outside this world. I would say it transformed the gaming industry.

But that was a big bet in 1995, that most of the effort would be on creating the gaming engine, not the game. Yeah, Unreal Engine is a big bundle of code and tools, a huge software package that provides all the functions you need to build any sort of a 3D graphics application. Game developers use it to make games and that's the predominant use, but it's also used in Hollywood film and television production to create 3D scenery in real time for production

sets to do pre-visualization. It's used by car makers to visualize their cars before they're constructed or manufactured. It's used by architects to preview buildings before they're made and industrial designers of all sorts. It provides all of the 3D simulation features you need, both for creating highly realistic 3D graphics, but also physics and interactions between objects and

making things happen like you might see in the real world. It supports a huge variety of styles from Pixar stylized movies to cell shading, to photorealism. It can be used for anything that needs real-time 3D graphics, including humans that populate those three-dimensional worlds. We'll probably talk a bunch of the details involved in the process of creating ultra-realistic humans because we humans care about how other humans look and how they

convey emotion and express how they speak, all that kind of stuff. But so yes, it's the 3D objects that are static, the 3D objects that are dynamic, and on the dynamic front, including humans that are ultra-dynamic. So all of that, you have to create this engine that simulates that world. The world is beautiful world that we know and love.

Okay, so that, but you know, you're early. So here you see Doom and you're trying to create this world and trying to create an engine that would not just power Unreal, the video game, but future video games. So how do you go about it? What are you thinking? And that, I should sort of linger on that. That is a crazy bet that we're going to build an engine as a company. Yeah, well, you know, the philosophy began with ZZT and continued onward. We're not just building a game for players to play. We're also building tools that could be used for

building that game or any other game and catering to all the artists and designers who would use the tool. And so that philosophy started with the very early Arts of Unreal development. I was building the tools for level designers like Cliff Posinski and artists like James Schmotz. As we began marketing the game, thinking it was six months away, we were constantly releasing screenshots and things like that. Other companies started calling us and saying they wanted to build 3D games too,

but they didn't have the expertise for that and they wanted to license our 3D engine. This was one of the coolest pivots in Epic's history. Microprose called up Mark Raine, our vice president and longtime business guy, and said they wanted to license our engine. And Mark Raine was like, oh, what? You want to license what? An engine?

What's the what engine? And they explained to him what they wanted to license. He's like, oh, that engine. Yeah, yeah, that's very expensive. But this was one of the critical things that kept Epic going through that three and a half years. We were starting to license our engine out to other developers. MicroProse took two licenses,

and we got in half a million dollars from that. And a company, GT Interactive, licensed our engine to build another game, and we got paid for that. And so we had this revenue stream funding the development of Unreal Engine from other games that were being built by other developers. Because they were the lifeline for the company, we took the engine business very seriously from the start. We set up mailing lists so that our partners could ask us questions, and all the developers

and artists working on our games were participating and helping customers. Everybody took that very seriously because it was our funding source. That's set this dual spirit of Epic of building technology and supporting game developers simultaneous with building games and supporting gamers. It's continued onward and just grown over time. Can you just go back to that, you programming, what are some interesting technical challenges

you had to overcome? You mentioned dynamic lighting. Like create this three-dimensional world and try to figure out the puzzle of how you actually do that at a time when nobody, Carmack and you, doing this kind of thing. It's a totally open wild west. So what are some interesting technical challenges

you had to try to solve? There's a lot. Some of them are visible on screen and some are behind the scenes and still require a lot of innovation. All the graphical techniques were really interesting challenges. And Unreal Engine in those early days went a lot further than the Quake engine in building

environments using constructive solid geometry with a real-time editor. That was a really interesting technical challenge. The idea is building is extremely tedious if you are only adding objects to the world. If you want to build a door then you need to add like a dozen different pieces of door frames and add a bunch of different walls together to fit together in the right shape. It sure would be easier if you could just start with a wall and subtract the door out. And so we had this way of adding geometry to the world and subtracting geometry and the engine

would perform all the calculations on that. And this is something that I'd been anticipating was possible for a long time. But when I finally got around to it, it took this 30-hour coding session to figure out all the special cases of the code that needed to be implemented to make that work. But in the course of 30 hours, I got constructive solid geometry

up and running. I started doing that, like handed it to James Schmaltz the next time we were together. It's like, okay, I think you're cheating here. So you create a giant torus and then add another giant torus interlocked with it, and then subtracted a cylinder from it, and created this really advanced composite object with just three operations.

He was like, whoa, I can't believe this. It's like, yeah, we figured it out. That was cool to see for the first time. It was probably the first time somebody had done constructive solid geometry in real time. But it was also a really useful artist tool that all the artists appreciated immediately began making use of. Can you speak to that, the 30-hour session?

I mean, this is not, from everything I know about computational geometry, doing this kind of thing, from your perspective, that's not easy. That's, what is it, the uncertainty, the open questions involved, the, I mean, even just on the algorithm front, how to do that efficiently, and then plus the usual programming thing of debugging. even just on the algorithm front, how to do that efficiently. And then plus the usual programming thing of debugging,

like suffering through the trickiness of it. And we don't have really, at that time, you don't have the tooling to really visualize everything that's going on really well. And you're probably using some crappy editor. I mean, there's just a lot of friction here. So the 30-hour session is one that's probably rough. It's a rough one. Your brain works in different ways depending on your state, right? Right.

There are some things that require really working on a problem fresh, where you've put together a bunch of logical pieces and now you just need to write a whole lot of code to make it all work together, and plumb a whole lot of data between a whole lot of different algorithms. But I think our brains have vastly more horsepower than we're able to directly access

by thinking of what code to type next. After you've been working for a very long time, you can get into a sleep-deprived state where you have much, much more direct access to that low-level knowledge. That's great. Yeah. Because there are symptoms that are well-studied of sleep deprivation. One of them is short-term memory loss. So you're working without the easy recall of the code you just typed, but your brain

is then freed to think about other problems. I'd built up this intuition over a very long period of time. The foundation for the subject is the binary space partitioning tree, this data structure invaded by a computer graphics researcher, Bruce Naylor. Carmack had picked up on that and had used the technique in Doom to really great effect. I'd picked up on that and had used the technique in Doom to really great effect.

And I'd picked up on that. And the Unreal Engine was using this technique for all of its graphics and rendering, but it was just additive geometry everywhere. And it had a lot of overlapping polygons and was pretty inefficient. So I had the idea that if we had a BSP tree, there was a really efficient way to do constructive solid geometry. And to do that, you had to break down the ways that if we had a BSP tree, there was a really efficient way to do constructive solid geometry. To do that, you had to break down the ways that different pieces of geometry can fit together.

I broke it down into like 14 different cases. Most of them are pretty simple, crank them out. Anyways, I got towards the end. There were some pretty complicated things like, how do you deal with coplanar polygons? They're in the same plane and pointing in the same direction versus the other direction. What cases should you keep them in? What cases should you eliminate them?

And so on and so on to create really efficient geometry output. And just plowing through it, eventually through mostly deduction, but some trial and error too. Sometimes you just have to try the possibilities and see what works. I cranked it out and it worked. The next day I came in like kind of weary and I was like, oh wow, this actually did work. It wasn't just a dream. So you're considering the edge cases also. I mean, that's the problem with geometry is like,

there's probably just gonna be all kinds of weird polygons that you have to see. You're like thinking that you're imagining the edge cases and trying to see how do I not create inefficiencies in this algorithm while still considering the edge cases, allowing for the edge cases. Yeah, you know, it's pretty easy to write software that's like 99% correct. It's the 1% that's the really hard part and where the devil lies in the details.

What about like lighting? Is there other interesting? Well, the funny answer is like we know the laws of physics. So it's actually really easy to do everything in computer graphics. The direct solution of the laws of physics is immensely slow. And so what we're finding are approximations rather than complete solutions. Because you need something that's a million times faster than the brute force answer. We should say that the physics of the scene is you just take a bunch of photons, bounce them around,

that's how light works. Yeah. That's going to be very inefficient because there's a lot of bouncing and a lot of photons. Yeah. Photon tracing is the subject matter that does brute force calculation of pixels on a screen from all of the light in the scene. And it works, and it's correct, and it

just is an implementation of laws of physics. And it's millions or billions of times slower than what we do. But Carmack had figured out how to do really cool lighting algorithms, including real-time lighting with objects moving around. And I hadn't taken it very far. So with Unreal Engine, I'd realize we don't have nearly enough computing performance

on our CPU to compute the light of every pixel on the screen from all of the light sources that affect it. We were at a six-cycle texture mapper, and we couldn't afford 30 more cycles for lighting. And so the answer had to be some approximation. The one that Carmack had picked up on in the Quake Engine was light mapping. If we, instead of calculating all the lighting on every pixel, what if we made a big texture that we placed over all the walls in the scene that was like wallpaper?

What if we say at every foot, we're going to compute a lighting value for just that one foot grid on the object rather than computing it everywhere. And then if we just linear interpolate that over the course of it, you get a lighting solution that actually works pretty well and is fast enough to work. And so a lot of Unreal Engine's lighting techniques were based on light mapping.

We introduced colored lighting. So you could have colored light sources. Then we realized, oh, since we're doing this and we're doing it on light mapping, we introduced colored lighting. So you could have colored light sources, then we realized since we're doing this and we're doing it on light maps, we can actually do some pretty expensive calculations, hundreds of cycles since we're only calculating it for every one foot of world space rather than every pixel.

And so we introduced a whole bunch of elaborate lighting effects like torch flickering and the caustic effects of water bouncing off of the surface and pulsing lights and blinking lights and everything else. I created a system for compositing them together. If you had an arbitrary number of light sources, they could all do that. Then I implemented a shadowing algorithm. If you cast a ray from a light to a point on a surface and see whether it intersects

any other geometry, if it doesn't intersect, then the light hits the object. And if it does intersect, then the light hits something else first, and that pixel on the object should be dark. So I built a real-time version of this, and it ran at about half a frame a second. So I was running around at half a frame a second, like shooting out light projectiles and looking at dynamic lighting. It's like someday computers will be fast enough for this, but not today. So I made a non-real-time version that

pre-calculates all the lighting and realized, oh wait, if you've pre-calculated the shadowing in an object, you can still apply the lighting dynamically as long as the light's not moving. So you could do torch flickering with shadows, and figure out all of the cases of dynamic and static lighting that were actually practical on a computer at the time and expose them to artists. This was the wonderful thing.

I was typing in these little features, exposing them to artists, and every day they'd find a drop-down with some more lighting options available to them, and they'd start using them, and they'd do things that I never thought possible. This was always the coolest thing. As a programmer building an engine, lighting options available to them and they'd start using them and they'd do things that I never thought possible. This was always the coolest thing. As a programmer building an engine, you might think you know the implications of the feature you're building, but artists are so clever that you'll always find that you've built

the capability of doing vastly more than you ever anticipated as they start to use combinations of features together in concert to do ever more amazing things. That's the genius of artists is they're given constraints and within those constraints, they create something you could have never possibly imagined given the constraints. That's such a beautiful coupling between engineering and artistry and art. That's right. It's timeless. What would the Renaissance painters do with paints and what do the early game artists do with early engines?

You know, everybody's figuring out the capabilities of their medium and you're seeing a revolution. This is blowing my mind. This is so fun. What about fog? You mentioned fog. That, I don't even know, how do you even do fog? So you mentioned Unreal, so the first version had fog.

Yeah, well it's a funny thing. So this graphics hardware company had just started up in Finland, and they released a screenshot of what their GPU was doing, and they showed a scene filled with volumetric fog. She had a foggy room with some light sources in it. When that happens in the real world, what you see are glows around the lights as the light brightens the fog around it, but the brightening of the fog diminishes over time because the fog absorbs some lighting.

And so the further you get away from the light, the more fall off there is. And you have a bunch of colored lights overlapping together in a space like that. The effect is just absolutely magical, like being out on a foggy light with street lamps above. It's something that's surreal and just beautiful. So I was like, oh my God, they figured out how to do real-time value metric fog. I have to figure it out myself. And so that was another 30 hour coding session.

Nice. But at the core I realized, okay, what's happening here is we have this lighting function saying that light at a particular point in space is falling off with the inverse square of the light, the distance from the light source. The inverse square is off from Isaac Newton, which applies to lighting. I had to realize was the way the fog interacted with the light was that,

you calculate the view from your eyes position to a point on a surface in the world. It's going through fog and you're accumulating more and more light as a function of the amount of light illuminating the fog at that point in time. And so, well, you know, I'd studied that in mechanical engineering without even knowing it. That's the line integral. You know, you have an integral over a line of some function. Well, this is exactly what it's for.

It's for accumulating values of a function over a continuous space and time. And, you know, I did a bunch of math and realized that, oh wow, the integral. Then I looked in a reference book of all of the integrals and thankfully people had solved them all and I realized the integral of this transformed one over r squared turns out to be solved by the arc tangent of r. If you calculate some parameters based on the position of the eye and the position of the surface Point you're at ultimately seeing Then you calculate exactly how much fog you can accumulate from that

Of course, you can't do that per pixel because that's hundreds of cycles of CPU time and so what we had to do is calculate volumetric fog on On something equivalent to a light map, but calculating fog every square meter in the world. We had enough performance for that, built value metric lighting and gave it to the artists, and they started building magically detailed levels with value metric fog in real time. Then decades later, I was talking to one of

the engineers who'd worked on that hardware and asked about their value metric fog, and told him how it inspired me to figure out how to do it in real time myself. He was like, oh no, we cheated. We just rendered it out of 3D Studio Max. That's awesome. That is so awesome.

That is so inspiring on so many levels. Yeah, that you saw that maybe it's possible, even if it was kind of smoke and mirrors, and then you actually made it happen. It's so inspiring to hear these kinds of stories when there's so much uncertainty, and you figure out, and so many constraints, and you figure out how to bring it to life in real time and create this world that Unreal did.

Maybe if we could just pause since you mentioned John Carmack a few times. As a fellow pioneer in the game industry at that time, what do you admire about John? John singularly has this intense dedication to getting the best result from his code and having absolutely no attachment to pass code. Some of the legendary things he did, the end result was an absolute breakthrough in

real-time computer graphics, weren't his first try. They were like his seventh or eighth try after he'd done something time and time again, tried it, found a better approach, thrown out the old one, built it again, and continually rewrote his code until he found the absolute best solution to a problem. And I think that stands as a lesson for every programmer to pick up on. When something is really, really important, its performance is absolutely critical to the product,

or its quality, or its capabilities, just iterate on it until you've achieved perfection and don't settle for the first or second solution is good enough. And it's, you know, the results of that, both you and him sort of defined the future of gaming of gaming worlds. It's so beautiful to see. It's like, it's just fascinating.

It's inspiring because like under so much uncertainty, under so many constraints, you figure out, you figure out a way. And that, you know, actually continues to this day, because yes, the hardware is improved incredibly, but in order to create an ultra realistic, highly dynamic, real time rendering of the world around us, it's still really, really difficult. And there's all these kinds of optimization, like you mentioned, maybe you can speak to that. of the world around us, it's still really, really difficult. And there's all these kinds of optimization,

like you mentioned. Maybe you can speak to that Unreal Engine 1 journey from 1 to 5.5 or 0.6 now. Or what, for 30 years, you've been creating virtual worlds. What's it like evolving a game engine for those 30 years when the hardware under you is improving exponentially? What are some things that changed and what are some universal truths that have not changed?

It's been an astonishing experience. Nobody 30 years ago had anticipated that we'd see the performance gains in hardware that we've actually seen in that timeframe. It's something like a hundred thousand times higher CPU performance between multiple cores and higher clock rates and more parallelism. Like, you know, if we had that in aviation then we'd be like taking a trip to neighboring stars. Off of Zantari, yeah.

Exactly. And in graphics it's been even more so. It's something like literally 10 million times more net usable GPU performance than we had back running on a Pentium 90 CPU, all in 30 years. And it's really made me appreciate that over the generations, some areas of our engine development have absolutely kept up with that technology. And the rendering team that works on Unreal Engine

are the real miracle workers there. Just about every generation of Unreal, we've replaced most of the rendering code. And the different leaders in different points in time and the different luminaries have built systems that were absolutely rethought and optimized for the latest generation of hardware. Unreal Engine 1 was built for software rendering and then the Voodoo 1 came along late in the cycle and we headed support for it but wasn't fully capable and utilized. Unreal Engine 2 was about bringing all the latest GPU hardware

acceleration features to the engine and keeping forward and building some new features like vehicles and a few other capabilities. This was in the early GPU era before GPUs had really broken out of everybody's expectations more as all. But that breakout occurred with DirectX 9 and the capabilities of programmable shaders. Once you had control of writing code running on the GPU that could color every pixel on the screen, and that GPU code was literally a factor of 100 times faster than the equivalent code I wrote a few years earlier on the Pentium 90.

And so that DirectX 9 generation was a godsend. And Andrew Scheiderker, a longtime Epic luminary, wrote the core of the Unreal Engine 3 render around real-time pixel shading, real-time lighting, being able to do dynamic shadows using several different techniques, and multi-threaded the render to support bits of the early dual dual core CPUs that were starting to show up at the time. It was a massive, massive graphical upgrade. Unreal Engine 4 made a number of improvements and just continued to add features to make more and more,

give artists more and more options for lighting and for geometry that created realism. But then I think probably our biggest single level of Leap came with Unreal Engine 5 with a nanite micropolygon geometry solution and with Lumen, the global illumination lighting solution, which I think really bridged the gap from game-ish computer graphics to total observable photo realism for artists who wanted to create that. And so that's been the evolution.

And the progress in the graphics side is absolutely astonishing, as it is on the audio side in a number of other areas. But parts of the engine also haven't changed all that much since the version I wrote and shipped in 1998. You know, the file management system has been optimized a number of times, but it hasn't been completely rethought. And the networking system, the ways that clients and servers talk together and negotiate game state is still an evolution of the thing I wrote. And you know, it's feeling kind of dated now.

You still see networking bugs in Fortnite, where for some reason when you're spectating, you're not seeing some parameters update. Well, that's because of the lossful nature of that networking model. And the biggest limitation that's built up over time is the single-threaded nature of game simulation in Unreal Engine.

We run a single-threaded simulation. If you have a 16-core CPU, we're using one core for game simulation and running with the complicated game logic, because single-threaded programming is orders of magnitude easier than multi-threaded programming. And we didn't want to burden either ourselves or our partners or the community with the complications of multi-threading. And know over time that becoming thing increasing

limitation you know so we're really thinking about and working on the next generation of technology and that you know being on your engine six and that's the generation we're actually going to go and address a number of the really core limitations that have been with us over the history of on your engine and and get those on the you on a better foundation that the modern world deserves, given everything that's been learned in the field of computing in that time frame. That's a terrifyingly challenging engineering problem. It seems like every version of Unreal Engine,

the amazing teams behind it are willing to just throw away most of the code. Or maybe I'm being a little bit too dramatic, but basically throw away the old approaches, like you mentioned with Carmack. And start again, like with Nanite and Lumen. Just keep optimizing to the current hardware, but even like rethinking how it's all done. But going from single threaded to multi threaded,

oh boy, that's terrifying. And that's in part, we'll talk about it, why maybe you have to rethink even the programming language that's being used to rethink a lot of things. That's fascinating. Can we just stick on Unreal Engine 5? So I watched, I watched a bunch of stuff, but the state of Unreal in GDC 2024. I was just giggling with excitement watching some of this stuff.

So just if we can talk about different things here, just to nerd out a little bit. So people should go watch this video they they they talked about the dirt just the ultra realistic and this is for Marvel 1943 which is kind of putting the Marvel Universe into Nazi occupied France in the winter there there's snow. And that's a moment in history, that's a very intense moment in history, and it really creates a feeling and puts you there.

There's so much to that, including the snow, but just looking at the dirt is a really nice way to show, like how do you add a lot of details to a scene in real time that like gives this experience like infinite detail like this is real this is super real and then I think in the talk they describe like what it what's entailed in the generation of the geometry, what's entailed in the lighting, all that kind of stuff. Maybe can you speak about dirt? What are the components for people who might not know

in like creating this ultra realistic, the texture, the lighting, the geometry, all of that. Like how nanite, how lumen all come together in this beautiful orchestra to paint in real-time the dirt. In Nazi occupied France in 1943. Yeah, there's a lot happening here on screen. The real hero of this image isn't epic, it's the artists and technical artists who worked together to build this environment because it and the reason we showed it

at GDC was it went way way beyond what we realized the system was capable of doing you know largely because of their brilliance and this is the magic of computer graphics. There's not one feature that makes this cool. There's a dozen technical features that each interplay and because of the ways that they interplay with each other, you really don't, it's hard to actually identify the individual components of it. One thing that's happening here that's really critical, oh yeah, now we're seeing it being turned off, is the lighting happening. The Lumen lighting system that's powering the scene is doing different kinds of lighting calculations at different scales.

This was the work of Daniel Wright following a decade of moving the state of the art of lighting forward. But his theory, which was rather controversial at the time, was that if you have enough levels of lighting calculation, then you can get global illumination working everywhere from the absolute highest levels of a scene, the buildings are casting correct shadows all the way down to details like you see on the dirt here, all working in concert and without distinguishable boundaries.

There is a good decade of foundational work there to make the lighting work. In particular, when you see the very detailed shadows interplaying between the ice and the dirt there, that's screen space lighting. There's actually shadow calculation going on, not based on the world, but on the pixels on the screen.

Because that is the only way that we could possibly do those calculations fast enough running them in a pixel shader. Yeah, watch this. When you add the objects, when you add the textures, the different layering, all the shadows that have to be computed. Yeah. Boy. That shadowing is an amazing thing.

But the reason that works is counter-intuitive. When somebody first explained it to me, I was like, that's really clever, but I don't think that will work. But it does work because if you observe the positions of incoming lights and you know the z-coordinates of the different pixels on the screen, you can figure out how geometry there is likely to include other geometry. Even though it's only an approximation and isn't perfect, it looks perfectly good to the human eye and gives you

the subtle shadowing that you see in a scene like this. It makes it look highly realistic. The shadowing influences other things. There's also some really interesting things happening with the color here. I'm not even sure what's causing it. It looks like color is bleeding from some parts of the snow onto other parts of the snow.

It looks like there's some subsurface scattering going on. I'm not even sure if that's being used in this scene. And then there's a material layering system for laying down layers of material, dirt, and snow, and other things, all making that work. Then there's the light bouncing off of the geometry, which is another system for lighting on top of the global illumination system. What about reflections too?

Does that count as the light bouncing? There's a light bouncing off of stuff to light it up in different interesting ways, but then there's also actually literal reflections in like, we're looking at a puddle in the dirt. Yeah, that's right. Well, the engine supports a number of different reflection techniques. One is calculating basically textures that capture all the lighting in the scene and then

bouncing that off of texture maps so you can see different lights bouncing off of different pixels in different ways. Then there's individual lighting, casting, reflections off of things too. A lot of this is under the control of designers. One of the things that's yet to do problem for the future is you don't just press a few buttons and this kind of scene magically appears.

This is a lot of work from some highly skilled people, not only building out this particular scene, but in setting up the material layers so that you get the dirt with the ice layered on top and all of the reflections working. And they had to make a number of technical art decisions to make this work. And if a novice who hadn't worked very hard

built the kind of scene like this, it wouldn't look nearly as good. So one of the challenges we have is to make building this kind of quality level even easier and more seamless and automatic. You'd like to just build a scene and say, use this material here and have this appearance come out of it. Yeah. Once you create the scene, you could do things.

I remember where they said, can you turn off the headlights? I forget. You could control the lighting. All of this we should say, like this is dynamic. So you can change the position of the light, you can turn on the lights, and off the lights.

That's incredible. So this is all real-time. The geometry, the lighting, the textures, all of it, real-time. This is the power of awesome technical art, three decades of feature development, and you have to give credit also to the 20 teraflops of graphics performance that Nvidia's delivering. Thanks, Nvidia.

90 megahertz to this, 90 megahertz is 90 megaflops, this is 20 teraflops. That's a big change. That's a lot. So one of the other things that they talk about in the presentation is about snow. So you have to, if you're talking about 1943 in Nazi Germany in the winter, you know,

there's a, you have to create a feeling, one of which is the season, the winter, the cold. And you can control the, you know. You have to cover everything in snow. Here shown is the ability to control how much snow covers the objects. The ability to do that for the artist is incredible. Just to control how much snow is in the scene dynamically like that. That's cool. Yeah.

That's really cool. It's a cool system for material layering and a dozen pieces coming together here. You also notice there's fogginess and there's some hot objects emanating fog. An artist did that. That didn't just arise automatically. That's called material layering. An artist creates a different materials and are able to layer the scene with it.

Yeah, layer materials on top of each other and see how much of each material should be protruding in different places with the engine handling, transitions, and things like that. And that's on top of the geometry that creates the structure of the scene and all the occlusions that have to be computed. Okay, I got to go to the other one that was just blowing my mind which is smoke. Let me see that. Look at that. Yeah. There's a fire in a trash can with the smoke, and the lighting and the shadows interplaying on the smoke.

This is real-time. Yeah, that's all real-time. What the hell? How do you do that? Was that, how do you do the smoke? Well, there's a really powerful particle system underneath. It's providing the technological foundations for this sort of thing. But there's awesome artistry on top of that, and an awesome physics engine powering it.

It's hard to tell exactly which piece is doing what. We have several different particle systems there. There's one for the fire, and then there's another one for the smoke coming out of it. The really interesting thing happening with the smoke here is that it's occluding light. There's calculation of how the light should diminish as it travels through smoke. So you're seeing the lighting on the smoke being the really interesting thing. There have been a lot of attempts,

but this was the first demo where I felt like this kind of smoke had really, no longer looked like a video game. It looked like just a burning trash can billowing out dark smoke. It's the artist's sophistication. It's a very, very, very large part of it. Yeah. Again, it's the interplay between the tooling and the artists. But yeah, like that, I could watch that for a long time.

I mean, there's something magical sitting around a fire in real life and just watching the fire and the smoke. I mean, humans have been doing that for, I don't know, hundreds of thousands of years maybe. And then that same, I was just staring at that and I wish the people would just stop talking and I could just watch the fire, infinitely. And that's immersion, that's like, I wanna be in that,

I wanna sit around that trash can with the fire and the smoke and watch and maybe warm myself because I was also feeling cold because of the snow. You're like, you really get immersed into the thing. I mean, it's so beautiful. It's true art. It's true art. It's just really wonderfully done.

But okay, so I gotta ask you about the humans. We talked about what's it like to create the scenes, but creating realistic humans is really tough. Can you speak to that, how to create ultra realistic humans? You have an actor behind this to convey emotion, show the nuances and the details of the faces. Maybe this is a good opportunity to also mention metahuman creator that's part of Unreal Engine.

Yeah, that's right. Humans are by far the hardest part of computer graphics because millions of years of evolution have given Yeah, that's right. Humans are by far the hardest part of computer graphics because millions of years of evolution have given us dedicated brain systems to detect patterns and faces and infer emotions and intent because cavemen had to, when they see a stranger, determine whether they were likely friendly or they might be trying to kill them. And so humans, we people in the world have extraordinarily detailed expectations of a face and we can notice imperfections, especially perfections arising from computer graphics

limitations. But it becomes by far the hardest problem. So the MetaHumans effort is part of a decades-long initiative that Vlad Mostylovich, the most talented digital humans visionary in the world has been working on for generations and generations of games. Serving individual clients around the game industry for a while and then joining Epic as part of the three lateral team and leading now a worldwide effort to build all the technologies required to make digital humans realistic.

Okay, one part is capturing humans. And so, we've got really advanced, dedicated hardware that puts a human in a capture sphere with dozens of cameras and them taking high resolution, high frame rate video of them as they go through a range of motions. And then capturing the human face is complicated because the nuance detail of our faces and how all the muscles and sinews and fat work together to give us different expressions. So it's not only about the shape of a person's face, but it's also about the entire range of motion that they might go through. Capturing one human requires a few hours of capture work in a dedicated environment like

that, then thousands of hours of processing work to capture a precise and real-time replicatable version of that human in the environment. So one of the things that it's done is just capturing an actor or actress in the real world and then using them in a video game. But the much more interesting thing going on is capturing thousands of humans to form a dataset whose goal is to encompass the entire range of faces in all of humanity. So going around every culture, every continent, every age and every face variety and capturing representative people.

So the entire range of faces is represented. Then being able to combine and merge those together to enable recreating an arbitrary face that the system's never seen before. So one of the ideas is capture giant amounts of this high precision data and then you use it to reconstruct a face at a consumer level. Like maybe take an iPhone photo of somebody's face and then capture a very accurate depiction of that, not by synthesizing it down in there on that device, but by combining all the known details of human faces to accurately capture the most accurate representation of that.

So that's the data problem. There's a lot of other problems of computer graphics. There's technology for rendering hair, which is really hard because you can't render every, again, we know the laws of physics. It would be easy to just render every hair, it would just be a billion times too slow. So you need approximations that capture the net effect of hair on rendering and on pixels

without calculating every single interaction of every light with every strand of hair. That's one part of it. There's detailed features for different parts of faces. There's subsurface scattering because we think of humans as opaque, but really our skin is light travels through it. It's not completely opaque. And the way in which light travels through skin has a huge impact on our appearance. You know, this is why you there's no way you can paint a mannequin to look realistic for a human. You know, it's just a solid surface, and we'll never have

the sort of detail you see. We should actually just linger on that. That kind of blew my mind, like thinking through that. I think I heard that sort of the oiliness of the skin creates very specific, nuanced, complex reflections. And then some light is absorbed and travels through the skin. And that creates, would it be fair to say, like micro shadows or something? It creates like textures that are human eyes

able to perceive and it creates the thing that we consider human, whatever that is. And so like you have to compute both that, the reflection, how light interacts with the oiliness of the skin and how it is also absorbed in and all of that while considering all the muscles involved in making the nuanced expression, just the subtle squinting of the eyes

or the subtle formation of a smile, it's a stupid, annoying subtlety of human faces that you have to capture. Like the difference between a real smile and a fake smile. Man, I love human faces. I love humans in general. But the way to show like beginning of a formation of a smile that actually reveals a deep sadness

All of that like when I watch a human face, I can like read that I could see that again This is the engineering and the artist you have to have the tools That in real time can render something like that and that's incredibly difficult Anyway, sorry. So yeah, so there's a lot of this kind of complexity in even just the lighting of a face. That's right. Getting faces right requires the interplay of literally dozens of different systems and aspects of computer graphics and if any one of them is wrong,

your eye is completely drawn to that and you find it on the wrong side of uncanny valley. So the level of perfection needed in this area is vastly, vastly higher than world rendering or grass or any of these other things. If the shadows on a work of architecture are slightly wrong, you're pretty perfect. Actually, your brain doesn't really care that much. But if anything wrong with the human,

it's totally jarring. Can you speak more to the creation of digital humans with MetaHuman, both on the editor side and bringing it to the live side? It seems like, because I've watched a bunch of videos, a bunch of individual developers doing it, it's not too difficult to bring a human to life using the tooling that Unreal Engine editor provides.

There are two main tools, compared to the old days where every face was created by hand by an artist from scratch. One is the MetaHuman Creator tool for creating faces where you have a huge number of parameters you can adjust to create a unique human by adjusting all the different capabilities of them. You can then get that out of MetaHuman Creator into Unreal Engine, and then you can add all kinds of computer graphics features there in the engine.

You could add clothing using the cloth simulation system, and you can adjust the hair and all these other parameters on the thing. And then there's MetaHuman Animator, a tool for animating a human based on a facial capture which can be done on a device as simple as like an iPhone and transfers the captured animation to the human you want. Which is not straightforward. If the actor has one face shape and the character on screen has another face shape, the translation that needs to be done from the actor to the face is actually really sophisticated and non-obvious. And if you just applied it literally, then it would be completely wrong from your point of view.

So those are the main tools that people are using now. And then within the Unreal Engine, then you have a face and you can do absolutely anything you want to it. And you could also, you know, if you decide to go outside of the metahuman geometry pipeline, you could build your own face, like any creature of any sort, and then use the animation tools to animate it. But, you know, this is 30 years into a project that's probably like 50 years in total to get to absolute photorealism and controllability for absolutely everything. So there's vast amounts of work still to do, and we don't feel like we've solved the problem at all.

We've just given artists a big productivity multiplier and a quality multiplier, but this is not in a state that we would say is done. But nevertheless, I've seen people use it really effectively. I saw it almost like plugins, maybe external services where you can get the faces to approximate the mouth movements required to speak a thing. So like that's a really useful feature. Yeah, that's right. When you have an artist or actor in your studio and you're recording a specific performance,

you can just capture their facial motion and apply it. But if all you have is a voice recording or you're generating a voice recording or it's parametric or procedural or AI generated, then you need the system to translate that speech not only to movement of the mouth and lips but also to facial expressions and the whole intent. When we're speaking it's our whole face that's active and emoting in different ways and not just a, it's not just a mechanical motion of the pieces. So we spoke a bit about the magic behind the virtual geometry system, but can you speak a little bit to Lumen

and in general what it takes to dynamically light in all the complicated ways, the faces, the scenes that we discussed, what are some interesting things to you that made the magic of it happen? Lumen is a system for global illumination, being it's supposed to calculate the interaction of light with the entire scene in a way that mimics reality. The first generation of engines that did lighting

just said, well, the light casts light and the surfaces it hits are lit, and the surfaces it doesn't directly hit are dark, and that's just all the techniques we have. So you'd have an area that wasn't hit by any light being completely black. But in reality, light bounces around the entire scene dynamically. When a light hits a red wall, then most of the blue and green light is absorbed, but the red light reflects off and now is hitting other things. And so if you have a red wall with a white floor,

light is bouncing off of the red wall into the floor. Now the floor is hitting other things. And so if you have a red wall with a white floor, light is bouncing off of the red wall into the floor, now the floor is being turned red. And so the entire bouncing of light around the scene through multiple bounces is the critical challenge to solve here. And again, laws of physics are known, and so the complete solution to this, it was written down in the 1950s, I think.

The real magic here in Lumen is the system that Daniel Wright developed over the course of many years based on ideas formed over a longer period of time, to calculate the way lighting bounces around at different scales, ranging from the scale of miles or kilometers down to the scale of pixels and millimeters, and to not only calculate at each level, but integrate it seamlessly at each level, to give the appearance of completely seamless and accurate lighting.

Previous techniques were highly specialized, and RS had to make a decision for each light about exactly what it did. The goal, and a lot of the practice with it right now, is you build a scene, you place lights in it, and it just works to make it that much easier. Yeah, I mean, we're watching, so I'd recommend people go to this blog post. Look at that, so dynamically,

we should say that there's the indoors and the outdoors, and to be able to dynamically compute the impact of outdoor light, just look at that. Look at how gorgeous that is. Yeah. Just the lighting. Look, we're looking now at an image of a cave. External light lighting, the intricate complexity of the insides of a cave.

Yeah, that's good. Light in the real world goes through a lot of bounces and the effects of it are very subtle, but when they're not there, you miss them. Often a person can't point out why a scene is wrong, but when they're not there, you miss them. Often a person can't point out why a scene is wrong, but they know it looks wrong, and it's the lack of the subtle lighting cues that we're seeing here. And for great, because we mentioned for great video games,

but also for great films, lighting can make a film, and we're just looking at sort of a very dramatic lighting of a scene. Like imagine stepping into the scene, it's exciting, it's terrifying, sort of a very dramatic lighting of a scene. Like imagine stepping into the scene, it's exciting, it's terrifying, and all of that has to do with light. The interplay between light and darkness.

It's incredible. It's really truly incredible. Like light is everything. And then to put the power of the tooling in the hands of an artist, that is really special. Yeah, the industry has gone through a massive evolution and there's so many supporting systems to make this awesome, and always are is. We're looking at reflections on smooth surfaces.

Oh boy. Look how gorgeous that is. Yeah, that's right. You have to appreciate the algorithms are doing quite a lot here. You can have a scene with a huge number of not just lights, but also bright objects who reflect light off of them. Every one of those has to be captured in the reflections in order for it to be realistic. You can't calculate every photon in the scene,

and so you need really detailed approximations. That's the field of computer graphics. It's about increasingly effective approximations of the laws of physics, which are just totally intractable. But the result of that graphics is a feeling, is an experience by the viewer. It's just to me, as a fan of, well, let's say beauty in the world, it's exciting that we can create that synthetically,

artificially via via graphics. It blows wide open the possibilities of storytelling. Outside of video games, a lot of people are using Unreal Engine for movies, for films. Big congrats. I saw War Is Over, a short film that was made with Unreal Engine, won an Oscar. So you can add that to the resume. So that's huge. You know, an Oscar winning film made with Unreal Engine. So what do you see as the future of the use of Unreal Engine and creating stories in the film industry? Increasing capabilities and productivity, you know in the film industry? Increasing capabilities

and productivity, you know, the limiting factor in every one of these businesses is cost and the more the engine can make their jobs easier, the more power that brings them. One of the big revolutions we've seen in Hollywood is moving away from doing computer graphics integration into a human scene with green screens, to moving to these large LED wall panels, with they're displaying real-time computer graphics powered by the Unreal Engine. That's a massive improvement in quality.

You can recognize the old green screen movies because the lighting on the characters is just wrong. As much as they try to fix it up, it never really works. When you're filming in front of a LED panel with LED light emitters in front of you as well, the actor not only picks up all of the lighting from the actual natural scene that they're supposed to appear in in the movie, but they also can look around and see it and they're aware of

exactly what set they're acting in. Just the overall end result is that much higher. It's as much because the actors are able to do their jobs better seeing the scene they're in, because the technology is enabling a better lighting calculation and a better interplay of virtual light and real-world light to make the end result awesome. So there's a lot of excitement around generative AI. What do you think is the future of the interplay

between what a human artist creates and what an AI system can create in Unreal Engine. I think a lot of people in the industry are overly optimistic about the rate of progress of AI for video and other things like that. The real problem is consistency. Like, spurting out an image is really high quality. But with video, over the course of seeing all the AI approaches have consistency

issues going from one place to another. And I don't think that those will just be remedied easily. Fundamentally, AI just doesn't have anything resembling an understanding of the entire scene therein, the entire arc of the movie or plot therein, and the entirety of the world around them and how it might affect the scene. Whereas game engines have that exactly where they need to be. I think what we're going to see in the space of world-class high-quality productions isn't just everybody moves to AI and a large part of the human creatives contributing to that are obsolete. I think what we're going to see is AI becoming a multiplying force on the power of human creatives, making them able to create better stuff more quickly and with higher quality

and results. I think unlike the fields of generative 2D art and generative text, I think the future of AI is much more complex and nuanced. I think your interview with Mark Zuckerberg conducted in VR was a really good first example of this. So you did this VR discussion. It was capturing your faces and then rendering a completely 3D computer graphics model of your faces.

Then the end result was patched up by an AI image enhancer. It was able to add an awful lot of the missing subtleties that are lost by normal computer graphics rendering. And that's the first step. You can imagine the output of Unreal Engine being enhanced by an AI pixel shading post processor is one thing. You can imagine creation of objects being enhanced, especially mashing up high-quality objects that have already been created.

Epic's Quixel team went around the world and scanned tens of thousands of real-world objects, extremely high levels of quality. They have everything from rocks to trees, to archaeological finds and so on, all captured there. We have an awesome library of them on the fab content site. What's missing is the ability to create arbitrary amounts of new content and you know, I think Using data like that and AI to create completely new trees that meet your specification from all of the knowledge

It is built up of high quality scan trees. It's gonna be a really valuable thing But you know, I don't see this this reducing the need for people or the role of people. Rather, I think it actually is probably an enhancer on that. I can't help but think when I go on Amazon and Netflix to watch a movie, there's a lot of linear content and most of it isn't very good because of the limitations of the media and the budgets and of other things. If we can use AI as an enhancer on that, then everybody's going to have

even more opportunity than they have now. Every single technological revolution that has changed the way that people work, but it's ultimately created more opportunity for people. Their pundits predicting that this might be the last, but I think just the opposite. I'm an optimist on this and an optimist that's going to create opportunity for everyone.

Do you think it will be possible to generate, so use generative AI to create dynamic objects, like you mentioned, trees in the Unreal Engine world, so create meshes and textures and empower the creator to create faster. Use meta knobs like hyperparameters versus very nuanced, where you can control much faster the look of a face, the look of a tree, all that kind of stuff. Yeah. I think that's the central challenge of

the next decade of game engines and AI for content creation of all sorts. Because you have two very different models to the world that are emerging. of game engines and AI for content creation of all sorts. Because you have two very different models of the world that are emerging. There's the scene graph. The technical term we use to describe the set of all of the objects in the world in a 3D world

maintained by Unreal Engine or another engine. So in the videos you saw, it's the rocks and the trees and the snow and the bridge and the people and all of these things. And each one has enormous amounts of data attached to it. Some are like texture maps. Some are sound files. Some are animation files.

And enormous amounts of detail all stored there in that procedure. And in this precise computer graphics representation that enables rendering it from any perspective with any settings and so on. It's a completely general system that has complete context about the state of the world at any point. And so you can always precisely reproduce it. If you play the same scene ten times in a row, it's always the same. It's never randomly changing. You're like, oh no, why did this character's face change mid-stream? But it's also rather limited because you have to build everything manually. That's costly and it's time consuming and requires expertise.

Then you have this other model of the world, which is what AI sees or thinks. If we could peer into what's really happening and its parameters, there's something like the mushy connections of neurons in a brain. It has a vast amount of knowledge about the world and about graphics, and about images, and about the world and about graphics and about images and about people and about everything else. It's stored in a human, incomprehensible form, but it can be extracted through queries, like asking it to produce an image from a prompt or a video from a prompt or whatever.

The huge problem with that is it's very mushy data. We don't know how to give it a command that will give us a precise result. And if it produces one image one time and we change our prompt slightly, it might produce something completely different. We are unable to art-direct it. And so it's this completely untamed tool. I think when we figure out more and more ways

to merge these and connect these two together, you can imagine AI enhancing the process of content creation in a traditional scene representation. You can imagine the scene representation being shared with the AI so the AI not only sees a prompt but also here's a list of all of the objects in the world and the characteristics and so on. It can learn more about how those objects should move and interact. If you get a constant feedback cycle going back and forth between an engine and AI, I think you can get the best of both worlds,

stable scenes but also the higher productivity of being able to get content out, and the ability to select specific parts of it and art direct those, and to have those art direction stick and be recognized as part of this permanent scene representation. Yeah. I can't wait until AI can operate not in the space of pixels, but in the space of scene graphs. Creating objects in the scene graph, whether it's like you mentioned, audio,

or any of the things that you mentioned about that empower the creator. Yeah, that's a super exciting future. I wonder if you could speak to a fear that people have on this topic of artists, engineers, fear of losing their jobs, being replaced by AI. Are there words of hope that you could offer them? This is certainly the most extreme example of it because AI is just so far ahead of prior technologies,

but similar fears were had in every other industry. There's a fear that digital music synthesis would obsolete musicians. There's a very brief period of time in which songs with digital music instruments like the early Minimoogs and Yamaha synthesizers weren't allowed to win certain music industry awards because they weren't considered real music. And then over time, the people were educated and realized, oh, these are just instruments people are playing and they're controlling them the same way they did before. There are similar questions about is computer art built in Photoshop really art or is it

just goofy computer stuff? And I think nowadays digital artists have gained respect. I think if you look at just the tools that have existed in Photoshop, some of them are pretty sophisticated and nowadays they have AI features. But I think AI is ultimately going to be another tool and the artist tool set. I think it's going to become a more powerful, directable, and human-serving tool in the future. I think a lot of the alienation comes from the prompt,

either being immensely powerful at giving you an entire creation, but then being completely unwilling to let you control the nuances of it. That feels alienating. You give it an image, but you're like, replace this part of it with this thing, or make that object green, and it can't do it. Often, it can't be convinced with any number of words in the product.

That makes it feel like the computer is taking control away from us, humans and artists, and is refusing to do what we want and has its own opinions. It feels like a competitor. I think when we have much, much, much more nuanced control of it and our skin's on and just like, yeah, let's enhance this object, do this, do that, do that. I'll feel it's like some of the tools that exist in Photoshop, which are in some ways compared to a paintbrush or superpowers already.

AI will come to feel like that too. It will increasingly serve creators creating and enhancing a work in a way that feels just a natural extension of their own bodies and minds. Of course, there is a real human pain to layoffs and there is a hype around AI, and then companies might try to implement AI systems and in so doing, layoff a bunch of folks and the pain that those folks feel is real. I think there's always going to be pain with these kinds of transformation that's happening,

and it's a terrible pain. Pain in general and the human experience is terrible. But I think I'm personally excited by the human AI collaboration as you've described in this whole process. So I think if you just keep being open to using the tools, constantly trying the cutting edge tools, how they can make you more productive, how can they empower you as a creator,

as an artist, or as an engineer, I think you're going to just keep winning. Yeah. There's a lot of complicated trends underway. It can be hard to break them down and distinguish them. I think a lot of people, the theories that get the biggest traction on social media often don't capture the real underlying motive forces at play there.

But yeah, I think AI involved in code production will probably create a net benefit for the need for humanity to be involved in coding. It may change parts of jobs. I don't think it's going to obsolete anybody who's willing to learn new ways of doing things. It's always been this way and I think that there's also a lot of overhype in AI. AI is really great at spewing out code that does something that a million GitHub repositories already do because it's learned the underlying pattern.

It's notoriously hard to get to do something new. It hasn't been done before, especially when it's a complex task. And the bigger amount of code you ask AI for, the more it leaves you with just a mess of code that sort of works. Then that's the problem with code. 99% works, but the 1% might be harder

to get to 100% with AI than with hand coding. And everybody who's looking at this topic should actually try using the coding assistants on hard problems and see how they do there. Yeah, I think for me personally, it makes it more fun and faster to generate boilerplate code. I can focus on the harder decisions, harder big picture decisions and harder

innovative decisions and all that stuff. It just makes programming more fun for me because I feel less lonely. Yeah. I have, like, even when it gives the wrong code, I get like, oh, okay, well, that's a way to do it. That's interesting. And then you can talk to it. Maybe that shows something about the programming experience that it is in part sometimes a bit lonely.

The topic of boilerplate code is an interesting one because the mere existence of boilerplate code is a failure of programming language and of the idea of creating software modules, right? You ask AI to create a sorting function, great. Now you have another sorting function that might be buggy alongside the million others that different people have written. It would be better to have a sorting function that's been written and tested and optimized and everybody relies on it. More modular software, I think, will actually reduce the opportunity of AI because people doing programming work will largely be solving unique problems. They're actually hard problems in themselves and not just connecting other widgets. Yeah, I think as in many cases, AI will just help improve the human systems by shining

a mirror to ourselves. I have to apologize for the pothead question ahead of time, but you've been, let's talk about the metaverse broadly. You've been a big proponent of the idea of the metaverse. We'll talk more specifically what that means today, but we've been talking about simulating reality better and better and better. So the pothead question is,

what does it take to simulate reality to the level we see around us today? How far away from that are we to simulate this ultra realistic, immersive fun reality that Earth is? What does it take? We're going to get shockingly close over the coming years, certainly less than 20 years. If you look at the progress,

what areas where we have achieved total photorealism and what areas where we fall short, we're getting very close in all non-human interactions you see in the world, walking through a jungle or a city, all the lighting. It's very close and that might be just a few years away, but then all of the problems that involve humans, human dialogue and intent have a much, much, much higher bar that they need to meet to satisfy our brains and convince us that they're realistic and or real. And I think that's going to be the primary challenge of graphics development and simulation development over the coming decade.

So the realistic humans, that's going to be the bottom line. Yeah, so and visual and behavior too. So everything. Yeah, I was asked about this about 10 years ago, and I said that even if you gave us an infinite amount of computing power, we couldn't simulate realistic humans because we simply don't have the algorithms. We have no idea how to simulate human intelligence. And that was absolutely the case then, but it's not really true anymore. What we're seeing with generative text AI is not only at a level that you could

say that it's actually doing a pretty good job of simulating humans at the text level, not at the emotional level yet, but at least at the level of words spoken and find more and more ways of training on more and more scenarios. You might have a very, very compelling human simulation going on in the next five years even. I'm not saying it's a good idea, but I think the arc of the technology is inextricably heading in that way and it's heading at a shocking rate. We don't say this enough,

but the current state of LLMs, if you put Alan Turing in conversation with Chad GPT, it really passes the Turing test. Like almost definitively passes the Turing test. Of course, we like keep raising the bar. Well, the Turing test is not real test, it's not useful test, whatever. We just keep raising the bar for AI words,

always going to be less, lesser than. But yeah, you have increasingly ultra-realistic faces and bodies combined with increasingly moving and powerful, full of emotion speech text. You know, I work with this amazing company called Level Labs that does text to speech well. There's companies that specialize in bringing text to life, right? That's going to increase different companies do that very well.

And so you, and then all of a sudden you have this synthetically created scene where human is speaking and you're moved to the point of tears because of the scene, beautifully lit face in the full darkness, the emotion, the drama of the scene. Yeah, I think, so you're, five, 10 years, maybe 20. Yeah, absolutely. We'll definitely see in our lifetimes.

Increasing the level of potheadness in my question, do you think we might live in a simulation? If we do or don't, how hard would it be to build such a simulation where we're fully convinced we're in it? Well, I don't think that these questions are necessarily unanswerable. I think I'd like to see more actual effort to ascertain, what is the underlying mechanism of the universe?

I don't think we're here for no reason at all. I think the world's a pretty cool place and the fact that we can exist and the laws of physics and especially a standard model of physics and all the parameters that lead to these atoms and life evolving and the presence of thermodynamic gradients, that's really cool. I think it's a worthy field to study more about that holistically. The question of are we living in a simulation ourselves always boils down to, well, if we are living in a simulation, what are they living in?

Because at some point there has to be some base reality. Or one of the philosophical theories that was put forth seriously was that there is no physical reality. If you have a system of equations, you know, such as the laws of physics, then all possible evolutions of dynamical systems under those equations kind of have a physical reality. So we just are kind of a manifestation of laws of math rather than needing an actual universe around us. I don't know, I like dabbling in that philosophy. And as we get CAI becoming smarter and smarter, and we get closer and closer to really capturing the full laws of physics, these questions become quite a lot more compelling.

You start to think if we're not living in a simulation, what are the things about this reality that are not simulatable? So what are the big mysteries around us? It feels like the physics is simulatable. It feels like a lot of the incredible stuff that we talked about, while super nice, seems simulatable. But then there's the flame of consciousness, the feeling of it, whatever that is that lights up in our eyes as humans. Maybe that's not simulatable. Maybe that is the thing. Maybe that's a thread that connects to the

explanation of the mechanism, as you said, of the universe. That's really important to understand and we're completely clueless about that mechanism. A lot of the religious texts sneak up on what that mechanism is, but we're still mostly clueless. We only have these leaps of faith and believing what that mechanism might be. The whole idea of nested simulations, perhaps,

given sufficiently advanced technology is kind of mooted such that if you wanted to simulate another reality, you're kind of just actually creating the reality. You're doing quantum mechanical operations that would produce the same result anyway and you're running them at full performance. So it's not really a nested simulation, it's just another thing that's happening in the universe. So that would be interesting, but I think it's ultimately a theological question. It's no longer cool to deal with theology as part of science. There's not been much work on that.

You can't publish results on those topics in a respected physics journal. So I think that it's kind of been set aside. But it's interesting to note that the laws of quantum mechanics themselves have a place for God or souls or whatever external source of input you might want to attach to such a thing. And that there's this idea of quantum waves function collapse that when we look at a quantum system evolving in perfect superposition of many possibilities and you go to observe it, you actually just see a specific possibility.

In a multi-slit experiment, the light ultimately ends up being observed going through one slit or the other. That's a place where there's this random number being injected into everything around us, trillions of trillions of trillions ofines per second and everything we're observing. If you want to attach some external input, well, there's a place. It could be seriously accessible to the rigors of science, but we just know so little there. Yeah, it's funny. In that area,

we know nothing more than cavemen know whatsoever. We know the laws of quantum mechanics and we have computers that may be soon more advanced than we are. But we just don't have any answers to the fundamental questions about life, the universe, and everything. Do you think more practically, do you think we'll create video games, video game worlds

of the metaverse variety in which humans will want to stay? So, I mean, to me, this kind of discussion of a simulated reality, the real test of immersion is like not wanting to go back to the real world. As a perfectly healthy, excited, normal human being choosing to stay in that world, how hard is that, do you think? Well, I think the technology is coming, and then there's a human question of should we go that far? Should we? Yeah.

Certainly as a game developer ourselves, Epic doesn't aspire to that. We make fun games. And the ultimate manifestation that we found is fun games that people play together to have fun in between work and the other things in their real lives. But as the simulations get more and more realistic

and the capabilities become more and more real, I think we have to ask ourselves some hard questions about how should humanity operate in that space? What are the limits that we should go to and what are the limits we should set? Yeah, I think there's going to be some hard questions. And I think maybe I'm just being a human centric here, but there should probably be some legal bounds on two things. Sort of not creating a reality in which humans would want to stay too long. Sort of, yeah, focusing more on the game side.

And more importantly, not creating simulations of humans that could suffer. To me, as we talked about creating ultra realistic humans, eventually that means creating humans that can suffer, they can fall in love and experience heartbreak and loss, they can fear death. And the more you simulate that to the full reality of the human condition, the more you get to this place where you have a simulated humans that is able to suffer.

I think legally speaking, I think you have to get to a place where that's not allowed. Like there is a line you can't cross. And that's a hard thing for humans to deal with. That's gonna be some interesting Supreme Court cases. Once you create a human sufficiently realistic to where they can suffer, means that human could be tortured and do terrible things to that human that's artificial,

quote unquote, but boy a that still feels wrong I don't know what that is but you feels wrong to torture to torture a simulated human now when you play a video game and it's a shooter and everybody's having fun that doesn't feel wrong but there's a line and that's having fun, that doesn't feel wrong. But there's a line, and that's going to be a fascinating line for the Supreme Court to explore. Oh man, what an exciting future we're living in. Yeah. I think the thing to appreciate is game developers have just generally been on the good spirited side of things.

If you look at the worst things that people do in popular video games today, it's like what, you rob a bank in GTA? But it's clearly fictional and all and fun and not serious and over the top. I think as things get more realistic, especially simulation of humans, yeah, there are some hard questions that will have to be answered there. But I think the thing that all game developers need to remember is we're here to make people's lives better by entertaining them, providing them with fun and a diversion from other things and being a part of their lives and not trying to be too big or being too much and not trying to provide an alternate to reality, but to just provide a fun source of entertainment,

like the many other things that people do for fun. So you've spoken, like I mentioned, about the metaverse for many years. Let's step back. What is the metaverse? And speaking of fun, Fortnite, just hundreds of millions of people

just enjoying themselves in this huge scale social game. You could call it a metaverse. Maybe you can describe the different flavors, the layers of how you see what the metaverse is. You know, the metaverse is an idea whose thought Christ goes up and down depending on who says what on what day. Some have an ability to drive it way down by opening their mouths.

Ultimately, this is about multiplayer social gaming experiences. You and your friends getting together in a 3D world and having fun together in any way you want. If you're playing Fortnite Battle Royale, I can remind you that is capturing the essence of the metaverse. It's especially in Fortnite when we got Sony on board so that all players on all platforms in Fortnite could play together, could voice chat together,

and could be part of a single game experience. It really took on a new nature which was not just like a multiplayer game with heritage from Doom, but also a true social experience between you and your friends. Fortnite Battle Royale is just one manifestation of that. Another one is like Rec Room VR, where you're standing around in VR with friends playing billiards or shooting hoops and are doing other light entertainment things.

I think every game that has a huge number of players who play together socially as part of their entertainment lives, I think is really getting at the core essence of the aspiration for the metaverse. We're still in the very early days of it. I was on the internet in like 1992 or so, and it it was a pretty bare-bones thing. I think when we look back at the state of gaming today we'll realize that we there's a lot further to go to get to the ultimate version of it but you know I think it's all on track and I think it was the time we released Fortnite Battle Royale and started playing together all of the people at Epic and

squads and experiencing that world that we realized that this trend was afoot and that we needed to do everything we could to give, to bring in other creators so that anybody could pile on to the work we were doing by creating their own worlds through Fortnite Creative and UEFN and creating more games and more genres that people could play and ever expanding the repertoire of fun. Yeah, I would love to sort of talk about different aspects of that a little bit more because

Epic has created a lot of amazing games, Unreal Tournament, Gears of War, but the game that I think is fair to say that transformed the gaming industry was Fortnite, Fortnite Battle Royale especially. Can you explain the origin story of Fortnite? Well, Fortnite has humble beginnings. In 2011, we've just been in the final days of finishing one of the Gears of War games, and we wanted to explore ideas for new games. We had a general idea that we would like to build some smaller games, online games, in order to learn more about that space,

and not just have one single massive game in production at all times and only one. And so everybody in the company was given a week to form a team and work with whichever co-workers they wanted and build a game using Unreal Engine. So you can actually build something pretty interesting in a week. And one of the teams built the very first version

of what became Fortnite. The very first version of it had a different art style, but it had the idea at the core that you're going to build forts by day using this building system. Then night would come and you'd defend the forts against zombies. And the longer you could go,

the more elaborate forts you could build and the more survival waves you could withstand and it would get cooler and cooler with time. Nice. And, you know, that game was in development for a very long time. We always saw the potential. Just the building aspect of it was incredibly fun. But we made different pivots at different times. At one point we moved to the current Fortnite art style away from kind of more of a realistic

style. Made it more in the Pixar vein of cool stylized characters. What was that decision like? Cause we should mention Gears of War is this like incredible, like shows off the graphics to the fullest. Different than the artistic style of Fortnite. It's amazing that the same company would make this like fun, silly graphic style of Fortnite, it's amazing that the same company would make this like fun, silly, graphic style of Fortnite, you know? People come to Epic because they want to work with the best people in the world,

and the artists bring a lot of different personal art aspirations and style capabilities, and many of them are very multi-talented. It can be British photoreal content or highly stylized content. Now, a lot of the best artists on Fortnite were a lot of the best artists on Gears of War to change styles, but continue doing awesome work. We'd realized that Fortnite could be really mainstream and it could be a game people play for a long time.

So having a more visually pleasing art style that's not as stressful as like a Call of Duty game where you're constantly pixel hunting a dark scene for somebody's rifle scope. That was the goal. So a few of the artists got through and defined the art style and we moved to it. At different points, it evolved towards being like a light MMO, like Destiny with rather complex RPG and stat systems. That evolved into an MMO like tower defense game.

MMO only in that persistence of items and stats, which became Fortnite, save the world mode, which we launched in early 2017. It was a moderate success. It paid its budget and we'd come out ahead. Then at the same time, Battle Royale genre was booming, PUBG had just come out,

tons of people at Epic were playing that. They're like, oh, this would be so cool if it had Fortnite building. And so we assembled a team in a war room, like 30 people in one big room. And they worked insanely hard for four weeks to build Battle Royale. So nice thing is all the content for Fortnite had been built over the previous seven years. They had a huge library of content, but no gameplay of the type they wanted. So they had to build it all in that four weeks and ship it.

That put Epic on an exponential growth curve where we went from 300 employees to thousands of employees and went from about $100 million in revenue to billions of dollars in revenue and became the center of the gaming world at the time. Can you actually speak to the technical challenge of going from mostly not online large-scale gaming platform to being able to support with Battle Royale a huge number of people playing with each other at the same exact time? Like what's the technically four weeks what's the technical challenges there that had to be overcome? Since 2012, we've been building

online backend systems to support player accounts and login, and all of the different systems there need to make a multiplayer game, and we've been building them to be scalable. By some miracle, we built them stably enough that they were able to scale up. The online team who is responsible for patching that code spent a year of intense work getting it to scale from like 40,000 concurrent users to 15 million concurrent users. Yeah, I mean, there's scaling, there's scaling. That's a lot.

That's immense. But they'd done such an awesome job of building the foundations that it was tractable, it was doable. If they hadn't done that, then the company would have died. Fortnite just wouldn't have been playable, and the whole thing would have failed. There's just so much detail there that makes all the difference. Because that's what Spotify has talked about that.

The latency, it's like how quickly you can deliver the song Changes the product from being this shady thing that I'd rather pirate the songs to like this is good enough to where I really enjoy The experience I want to use it. Yeah, so like Yeah, that's really important to create an experience for 15 concurrent users to where they're not Where it's not lagging or it actually works. Is there something you could say to how difficult that is to pull off? The trend nowadays for building online services is microservices. There's not one big server that handles all the interactions with Fortnite. There's game servers running 100 player game instances for each Battle Royale session and then there's an account server and many instances of it

all talking to a shared database and there's hundreds of different microservices talking to each other and so scaling is a matter of identifying what are the bottlenecks in that system and making sure that each one can scale and has enough redundancy to be able to handle the load. Thank God for Amazon Web Services and cloud hosting because Epic went to 15 million concurrent users without buying any server hardware. We are able to just call up Amazon and say we need more. There was a period of time there where Fortnite was undergoing this exponential growth,

and we'd find one week we ran out of servers in Brazil during a heavy weekend of play. Next week, we had an even heavier weekend of play, and there were servers to handle it. Somebody at Amazon had drop-shipped millions of dollars of server hardware into Brazil and turned it on just in time for Fortnite to need it. And there are a lot of unsung heroes in that story,

many of whom we have never heard of. Yeah, I mean, behind AWS, many unsung heroes. There's like so much of those folks who run the modern internet. All the incredible services, the games, the services that we take for granted are currently being run on AWS or were originally and Google Cloud and so on.

Yeah, can you speak to how much money Fortnite made? So this is one of the greatest successes in the history of video games also. Fortnite makes billions of dollars a year. That's the majority of Epic's revenue. That we have a robust business around Unreal Engine licensing, Rocket League and Fall Guys, and some other tools like the Fab Content Marketplace.

But the majority of it is Fortnite. Because we've chosen to reinvest heavily in building what we think is the future of technology, we're spending more every year than we're making. because we've chosen to reinvest heavily in building what we think is the future of technology, we're spending more every year than we're making. And for a bit of time, we were spending over a billion dollars a year more than we were making and we found that to be unsustainable and we went through some painful layoffs at that time.

And then we stabilized and now we're spending several hundred million dollars a year more than we're making, which we can very well afford to do because we have billions of dollars in the bank, thanks to a combination of the profits we made when we were a very small company with a very big game and because of investment we've raised. We're not an oil well pumping oil out of the ground where we discovered oil. We are growing to be a future technology powerhouse and we think that 3D space, and the future real-time 3D simulations is going to be one of the major facets of technology powerhouse and we think the 3D space and the future real-time 3D simulations is going to be one of the major facets

of technology for humanity and we're all in investing in that. Yeah, it's exciting to see that investing in a long-term future sort of taking the risk of doing the research and defining the next chapter of Epic. So using the successes of the day to invest into the successes of tomorrow that might look very different, like completely different.

And part of that is investing in the developments, the research and the innovation in the Unreal Engine. That's right. We're a company that can start working on a project knowing that we won't reach fruition or make any money from it at all for three years, four years, five years. Um, we're totally okay with that. And, you know, that's the cycle that's fueled our growth over time. It's constantly investing in the future and being a serious company that's doing

serious R and D side by side with shipping and maintaining products and earning money from them. So can you speak to, I mean there's several directions here, so one of them, sort of the future evolution of this idea of the metaverse, so potentially creating communities, so Fortnite is this incredible huge community of humans interacting, but your vision is to go outside of just one game. So what is the kinds of standards that you're thinking about building such that people can sort of have an identity and almost travel between games and that kind of thing? Let me start with the present of gaming and why it sucks.

That's a good start. Sure. Fortnite is an awesome thing. You go into Fortnite, there's 100 million monthly active users there. A huge number of your own friends are there. You can play with them. Go from experience to experience seamlessly

without leaving the app. There are 100,000 different islands you can play on, and some of them are really awesome. And there are constant new ones coming out and constant things to do. If you want to play Roblox, you quit out of the Fortnite app, you launch the Roblox app, different program,

different friend system, different account names. Your username in Fortnite and your username in Roblox are different names and they're not connected to each other. So you have to remake all your friends and then find different things to play and now the controls are different. So you have to relearn how the joystick, mouse, keyboard, controller works in that experience. You have to go from place to place and you buy some stuff in Fortnite and it's really cool and you can use it anywhere in

Fortnite and then you go in Roblox and you don't have that stuff. You have to buy different stuff and that stuff only works in Roblox. Same with Call of Duty, it's another isolated place. Same with World of Warcraft and same with League of Legends. Every place you go is its own unique place, different friends, different account names, different people, and there's no social cohesion between them at all. And a long time ago, consoles set out to solve this problem by creating their console-wide friend system and account.

So your friend on PlayStation in one game is your friends on PlayStation in another game. But only on PlayStation. If you're on Xbox, you can't see PlayStation friends. And so you have two basically orthogonal and cross-cutting divisions of the world into fiefdoms, which were not created with bad intentions, but arose and are separated, isolated islands. One is the platforms and their social services, Xbox, PlayStation, Nintendo, it's Steam, Epic if you add it to the list, and the other is these different games people play.

And you know, because of this weird historical artifact, we're left in a world where people can't seamlessly move from games to games bringing their friends and their stuff. So the solution to this is to federate and connect all the systems together. All the players on all the different platforms can be recognized by their name and put the at sign in it so your Xbox names and your Fortnite or Epic names and your Steam names can all live together and interoperate together in a single space. So unifying the social ecosystems is one thing that needs to happen. The next and bigger challenge is to unify the economies too. Now, I'm not talking about like a sword you have in

World of Warcraft should work in Fortnite. Every game is going to have its own gameplay rules, and a lot of games are going to have stuff that only works in them. But there's a huge set of games that have in common the idea of a cosmetic system that does not affect gameplay outcomes, but is purely cool looks and cool appearances. Most of the major multiplayer games have them. And you know, if you look at games, you could probably bundle together about 70% of them and say they're similar enough that they could actually interoperate.

You could own an outfit in Fortnite, own an outfit in Roblox, and own the same outfit in maybe Call of Duty, and maybe 100 or 200 other games, and actually expect they would work together. And you find other kinds of items are probably interoperable too. Fortnite has car outfits, so know, buy different appearances of a car.

And when you find a physical car in the world of Fortnite, if you're the first person to get into it in that session, boom, it takes on your, you know, your chosen car cosmetic. And now you have a cool car that's identifiable as yours. You know, we realized early on with Fortnite that the key to making Fortnite work as a creator economy was to open up the revenue from the item shop to all of those sources of engagement. There are two big things happening in Fortnite that make it work as a product and as a business.

One is the game modes, Fortnite Battle Royale and all of the user modes and everything else, are sources of engagement. People play there because it's super fun. Because they're playing there, they're willing to buy cool stuff to make their character look cooler. And so you have all these sources of engagement but the sources of engagement don't make money directly. You can't spend money in Fortnite Battle Royale to buy a game item. Like everything's you know the

gameplay is not pay-to-win and it's all just a game. So we make money from the item shop. The item shop only adjusts because of the sources of engagement. If you weren't playing Battle Royale, trust me, nobody would want to buy a Fortnite outfit. If you weren't playing any Fortnite games, why would you buy Fortnite outfits? So you have all the revenue in this item shop economy and all the engagement in this engagement economy.

The thing that magically makes the Fortnite creator economy works is revenue sharing. Item shop spending, according to sources of engagement, by engagement. If you buy an item and you've played 40% of your time in Battle Royale and 60% of your time in these user modes, the money you spent, the portion of that that's profit can be separated out and paid out

to all the different creators who participate in that economy. And that's why Fortnite scaled up to a $400 million dollar creator economy so far and is growing. It's amazing. One of the really critical things we aim to do in designing that is ensure it's a creator economy that could scale to other companies, other ecosystems. And say, you know, right now we have many industry standards bodies.

One standardized game ratings, age ratings of games, another standardized file formats for the web, another standardizing file formats for 3D, like Kronos groups and the Metaverse standards form. If we had a standards body standardize, what are portable outfits in games? Game outfits that you could buy in one game that work in another.

What are their dimensions and what are their capabilities, and what can you do and what can't you do, and so on. Then you could have an item economy where every game agrees to respect each other's item purchases of that sort, and revenue is shared between ecosystems as well. That would be incredible. That would be so amazing. Is there, first of all, and it's shared between ecosystems as well. That would be incredible. That would be so amazing.

Is there, first of all, just, it seems silly, maybe for people who don't play video games, but an outfit is an important, if an outfit can be persistent across video games, I mean, I don't know, what's the purpose of life? Like, why do we wear clothing? Clothing is a part of our identity. It's how we present ourselves to the world.

It's, you know, I wear this stupid suit and tie. It feels good. It feels good when I put it on. And even like the other outfit, I have two outfits. This and then a black t-shirt and jeans. And it feels good to wear that. It feels like me when I look in the mirror, okay, I know that guy. And to be able to wear that. It feels like me when I look in the mirror, okay, I know that guy.

And to be able to have that outfit go from game to game to game, maybe across the years, that would be wonderful. I wonder if you could just even comment, could there also be another standardization about the value for more complicated items? So, you know, take a sword from Diablo and transfer to a gun in Fortnite, but based on the value, some you know, some generic concept of money.

So the value of a thing in one game versus the value of a thing in another game, where you're almost operating in the space of value versus the actual Items or is that already getting too? Too general I think this can be done Yeah, we did a lot of analysis of the fortnight economy and found that Some fortnight Experiences lead to or correlate with higher spending than others. Battle Royale is relatively strong in that area

because you see your character from behind and see all of your other characters from the front, and you have lots of opportunities to really see who you are and to interact with other players. A lot of games have that characteristic. One funny anomaly stood out. There's this game that was one of the big breakthroughs in Fortnite, Only Up.

It's a game where you're just climbing up and up by following paths of stacks of objects and things. It was just stupid fun. Everybody loved it. We found people weren't spending a lot of money on outfits when they were playing Only Up. It's intuitive actually. You're not seeing other players. If you see anything, you're seeing their butt as you're trying to catch up to them,

jumping from object to object and they're above you. It wasn't a mode that showed off outfits very much, but you can determine the economic correlation between a game mode and spending. That's so fascinating. I mean, Fortnite is this gigantic economy where you could do those kinds of studies. You can understand markets,

the digital markets as they emerge amongst humans and what they value. And from that value, you can probably have a very stable kind of money that emerges. Yeah, I think so. You don't need like an alternate currency system. You know, unfortunately a bunch of ideas have been conflated because people are trying to hype up different things, but you know this idea of large-scale multiplayer social gaming, you know, that notion of the metaverse, you know, there's 600 to

800 million people playing that kind of game every month. So like you know that's real and that's happening and it's very much underway. VR has a much smaller audience. I don't think you need VR to have anything like this. VR is hardware that may or may not enhance the experience for some usage cases. For some it will probably be better and for some it will probably be worse, but certainly there's not any set of battle royale players flocking to VR.

And the other thing is NFT is trying to equate digital or cryptocurrency to the metaverse. It's like, well, it's just a way of denoting money or value exchange. You can do that with money or you can do it with NFTs or whatever, but there's nothing about this future digital economy that fundamentally requires cryptocurrency or whatever. What you need is interoperability. Interoperability can happen through a blockchain, it can happen through a database, it can happen through

standards bodies, defining standards and protocols. And we've been doing it for hundreds of years since the railroads were standardized. And, you know, it's not something that totally requires a novel technological solution. Yeah. I mean, even on the topic of cryptocurrency, it's very frustrating. You know, blockchain and crypto is a really powerful technology that I think can enable a lot of the things we're talking about. But so many people use it to try to make money, to create these bubbles and the hype and the meme coins and that so on and so forth that becomes much less about that drifts far away and rapidly from things that are actually

of value, which is the experience of playing Fortnite and how you look when you play Battle Royale. That's, I mean, it sounds ridiculous to say, but it's true, that's valuable. That's like, you know, you have like gold in the physical space. We know that holds value. How your outfit looks like in Fortnite, that as you're saying, provably holds value. How your outfit looks like in Fortnite,

that as you're saying, provably holds value. So you wanna connect like a standard definition of money value to that and not let it become this hype thing, which NFTs that you mentioned are just become that. It like, it quickly drifts away into the land of people trying to buy and sell and try to make money versus like staying close to the thing that people actually value. Forget the money.

It's more about exchanging valuable experiences or things of value. So you can play Fortnite and then go to another video game and continue the valuable experience and then come back to Fortnite and do that kind of thing. So you're saying there might be a way to do that and to basically create standards the way the web has different standards for displaying websites and all this kind of stuff

or the communication that's required on the networking side. So all the different standards that make the web work, there need to be those kinds of standards. Like, what would those standards look like to enable the metaverse? We need a lot of different things. The one area where the standards probably have been very successful in creating working standards implemented by all the major engines today is in low level file formats for data interchange. The web has PNG files for 2D images

and MP3 files for audio. And 3D has the Pixar USD file format, the universal scene description, which is a description of the scene graph, the entire set of objects in the scene and all of their parameters so that any engine that supports those features could import that and then render the same scene as the engine they came from.

Large parts of this work across Unreal Engine Unity and Blender and all of these 3D packages of different sorts. And there's the GLTF texture format, which stores textures and geometry and other low level data for 3D objects. When you see a Fortnite character, that file format together with the image file formats can store their static appearance,

the shape of their body, even their animations, and their different poses. And the appearance of them, the different standard file formats could store all of the sounds they make in their remotes, but we're still missing a bunch of pieces. The biggest missing piece is the programming language that's at the center of standardizing the Matterverse. Now, if you look at the web,

the web is a combination of a bunch of different technologies. The two biggest ones are HTML, which describes the 2D scene graph, or the 2D layout of controls and objects on the web page. But that's just static data. It's just a non-moving, non-animating web page. And then you have the JavaScript programming language, which is used to manipulate that, to display things

to the user, and to implement anything you could implement in code. So it's a little programming language that runs in your web browser. And the metaverse needs something that performs that similar role. But the metaverse and 3D gaming in general needs something that's rather more powerful, more safe, more scalable, and more capable than JavaScript. Because the metaverse is actually a more difficult technical problem than a web page. A web page like an app is just a single bundle of

code and content that somebody, a company, has prepared and they release it and it stays exactly what it is until they release a new version and it's upgraded from version to version as it goes. But the metaverse needs to be a composite of code and content built by millions of different people that could potentially form a seamless world together. Yes, fully distributed collaborative. First of all, also the amount of data. It doesn't have to be that way,

but websites are showing very little information. The metaverse, even when it looks like something like Fortnite, just the amount of information that's conveyed in the scene graph, as the individual players are collaborating, is a huge, huge, huge amount. Yeah, the highest detail of Fortnite updates amount to about 60 gigabytes of data. And you know, that's just a small part of what exists in the Fortnite creative economy.

And if you look at what this might be in a decade, as standards emerge, you might have x of bytes of data out there. Fortnite Battle Royale is I don't think the ultimate manifestation of gameplay that will ever be invented. What we've seen time and time again is that as we gain more technical capabilities, graphics gets more capable, CPUs become more performant, web services become ever more scalable, we see new genres of games that emerged that weren't possible before. And Doom ushered in the era of Deathmatch, the first time 3D multiplayer game was even possible at all.

You know, the early Battle Royale games, starting about 10 years or 15 years ago, only became possible back then. You couldn't have built one 20 years ago because you just couldn't have rendered an environment that's as large as a VR game with that many players, with that level of interaction and performance. It was just not possible to run it.

So you got a certain level of technical capabilities and a genre came out that proved to be by far the best shooter genre ever invented. But I think there are numerous, numerous more genres, some of which are better than any of the existing ones that will be invented as we get more and more capabilities. Some of the capabilities we're lacking now are the ability to build environments and game simulations that span more work than a single company can possibly create.

And you see the birth of that idea in Fortnite and Roblox, where there are tens of thousands of creators each building content. Users are playing meaningful amounts of it all. And so there's an ecosystem that's scaled larger than company. But it's still very much, you go into one island and you play that creator's work. The other direction of its scalability

is putting more and more of people's work together in a seamless, continuous play space for games where that makes sense. You can imagine a game taking place in an environment that's the size of a continent or Earth, in which you can go from place to place and then see different areas which are maintained by different people. As you go into different spaces, the game rules are customized according to that and you can go from experience to experience.

And instead of having just one company's authorship ever present wherever you are, you know, you'd see you'd be driving a car built by one person, carrying weapons built by 20 other people, and taking place in a simulation in an environment that's built by thousands of other people, working for separate companies or their own entrepreneurs or Indies or enthusiasts, all working together simultaneously. We totally lack the programming foundations for that. The kinds of code you would need to write now to make that happen are just not practical.

So we're investing massively in building new programming language technologies around verse and our proposed standards for future metaverse programming that we hope will solve those kinds of problems and make that kind of world possible. So first of all, that's a super exciting future where, you know, it's not hundreds or thousands, it's millions of creators that can just create different small or big elements of a world as big as Earth. Just if you sort of close your eyes and imagine that world, that's really exciting.

Where it's not a centralized company controlling the release of a particular island or so on. It's people constantly dynamically modifying all the islands of reality in this digital world. So if you could speak to some of the technologies that can enable that, you mentioned the first programming language. First of all, also how legit is it for you, CEO of Epic Games, to be a co-author? The programming language theorists are losing their mind. So co-author on a

paper that's describing some of the sort of nuanced details of a programming language. So maybe you could speak to this programming language called Verse. It's a functional logic language. What is it? What are some cool features of Verse? Verse is a programming language that we're building for

large-scale simulation programming. It's designed to make it easy to write code that can scale up to not only you building a Fortnite island, but you building modules or components that can be used by millions of other programmers and code just in a huge environment, and also can scale up to a huge-scale simulation. Some games will be small. Battle Royale might find that 100 players is actually optimal. It might be the 1,000 player version of Battle Royale would be worse, but I bet there are

1,000, 1,000,000,000, and 10s of million player experiences that are even better than that that will yet to be discovered. And so... Wait a minute. Tens of millions of players together. Sure. We've had a Fortnite event that has attracted 15 million concurrent users, but the fact that they're all divided up into servers with 100 players each for those events isn't really a positive.

It's just a limitation of the technology. Tracing back to Unreal Engine 1 and its single threading decisions. If we could build a concert that where all the concert participants, potentially tens of millions of them, could participate together simultaneously and see that there's that massive a crowd and they could all do interesting things and interact with each other, that would be way cooler. with each other that will be way cooler. Just uh if we just sorry I'm just loading it in just imagining together in one scene graph 10 million people interacting what a cool world that is. Sure well you know 10 million people you have less than 10 million pixels on your screen so as the Nyquist sampling theorem say it says that you don't need full overhead for every player you need to

render the players here around you in some approximation of everything else. Yeah, Tim, but there's also a networking component. Yeah. You're speaking to the rendering, but like, oh boy. There's a lot of work that has to happen there, but you know, this is what we do for a living, we solve hard problems.

I understand. Because if they're easy, then other people could have solved them already. That's really cool though, just sort of the possibility, the vision of that is really cool. Even just, even 100,000 people were like, bring 10,000 together just to, I mean,

there's a reason in the physical world when you go to a concert, and you have all those people around you, that energy, or you go to a football game, that energy is unlike anything else. And if you can bring that energy to the digital world, that's amazing. Yeah, but anyway, so sorry. So what, on the technology side of bringing that to life,

on the programming language side, can you continue, as I rudely interrupt you, talking about verse? Verse is a functional logic language, because we think that that's the way to make the most simple and powerful language simultaneously. Back in the 1970s, the programming language designer who built Pascal,

one of the early programming languages, Niklaus Wirth or Nicholas Wirth, as Americans might call him, stated this principle that programming language should achieve a high degree of power not by having a lot of features, but by having a small number of features that work together and can be composed together arbitrarily. So that you have to learn a relatively small set of things,

and then the real knowledge comes as you learn ways to combine them to achieve bigger and bigger programs. And so there's a long history to the field of programming languages, but in the 1950s, the first programming language designers got together and built the first standardized language called Algol. And there was this meeting in 1956, very few people even know about it, but it's where all the major foundations of modern programming languages were decided on, that the C family of languages inherited and so we're very much living in a world that was defined by them.

And thankfully they got a whole lot of things right. They defined how functions should work, how variables should work, and how recursion should work and thank God they got those things right. But they got a few things wrong versus trying to fix those. And that's the functional logic part of it. The interesting thing about functional logic language is that in an old school language, an expression produces a value. In a functional logic language, an expression can produce zero, one, or multiple values. If it produces zero values, we might say it fails. And if

it produces one value, we say it succeeds. And If it produces zero values, we might say it fails. And if it produces one value, we say it succeeds. And if it produces multiple values, it's kind of providing a set of values you could iterate over. And so there are a bunch of features in today's programming languages that were defined in an ad hoc way without really thinking this through, this zero, one, or many values way. And that's the problem that functional logic languages

address. The most basic example is an if statement in a programming language. If some condition holds then do this thing, otherwise do that thing. And in the language today, this is done with variables of type Boolean or expressions that produce Booleans. We have Boolean variables that are either true or false. We have expressions that evaluate to billions, and so you can express a condition as a bunch of these features together, but you've lost any computation you've done in doing that Boolean expression evaluation. So in a functional logic language, your condition wouldn't do that. It would either succeed and produce

a value or it would fail. If it succeeds, it goes to the then branch. Your operation succeeded, now you're running this one batch of code and if your expression failed then you go to the else branch. But the exciting thing about that is your expression that succeeds or fails can produce values and bind variables that are then accessed by the then branch. So you can write a conditional where you can only get to the inside of the condition, the then, if a bunch of variables have successfully been bound to variables. So it lets you test if some conditions hold,

and then use the results of those tests. And that gives you a much higher level of reliability. And then a for loop, in a traditional language, it's just a bunch of imperative code that's woven together to produce a bunch of values iteratively. It's rather awkward to do complicated things in for loops, and so you often end up with the ever more complicated constructs built to work around that, like iterators and other things.

The idea of functional logic languages is your for loop can just produce multiple values. And if it produces zero values, you go through zero iterations, and it produces a bunch of values, you go through all of those as your iterations. Rather than having a bunch of nested loops, you can write arbitrary things that look like SQL queries in a condition or in a for loop that bind a bunch of variables, do a bunch of tests, produce a bunch of a series of results in some order that you're iterating over. And then you can handle all of them and produce a result. So you kind of gain the power of SQL queries,

large complex queries over data structures in a language that is much simpler in which your code is just performing simple iterative operations. And so it kind of gives you the best of databases and of regular programming in a much more uniform way. And the power of this is now users can write functions that not only produce a value, you can write functions that might fail. And so you can write a function that answers a question. The answer can be either yes and my value is this or no.

And then you can combine these together into arbitrary queries. And if you like, the funny thing is that this is not how C++ works. And so when we have Epic programmers moving over from C++ and writing their first verse code, they try to write C++ code in verse style. And it actually ends up being convoluted code that's worse than good C++ or good verse. But after a few months, they get up to speed, and they're

writing really awesome code that's tighter and more compact than before. With users who've never programmed before but are learning programming for the first time in the context of Fortnite, it's really fascinating. You see, these users are learning this, it becomes their intuition. They just assume programming works this way and they're writing

way more advanced and interesting for loops and conditions than we're often writing internally because they've kind of got the core concepts. Yeah. He said a lot of really interesting stuff. First of all, it's very interesting that there's a lot of people learning programming for the first time with verse, which is a very different way to look at programming. Some deep sense, as you're saying, a very intuitive way to look at programming. And in some deep sense, as you're saying, a very intuitive way to learn programming.

But there's a lot of properties about this being a logical language. Now, one of which, maybe speak also about confluence, but also correctness. So being able to prove the correctness of a code is basically easier to write bug-free code. Can you just speak to that and the importance of that when you're building the metaverse? Yeah, right. So the challenge with the metaverse is, first of all, that it's a huge base of

code that's evolving over time and written by many authors. You might see every second a new module is updated somewhere, and you expect in this live, ever-running simulation that never shuts down, for everything to upgrade live in place. And so one critical component that is the ability to release an update to something you've already published and be sure that it's backwards compatible with the one that you've already released. And that's essentially a type checking problem, checking that your new interface is backwards compatible

with your old one. And that comes down to the type system of the language. There's been a lot of very interesting research on type systems over the years, most of which hasn't ever made it into the C++ programming language, unfortunately. But you see several branches of that whole field. One of the really interesting things that Java and C Sharp did in the early days, and then later abandoned and didn't bother update, was defining a very

rigorous set of rules for if you publish a module with one set of types today, then what changes can you make to that module for your future updates to it that don't break backwards compatibility? And that's a problem for type checking. You know, like say you have a function that promises to return some integer. Well, in the future you could say that returns some natural number because every natural number is an integer. So that's a backwards compatible change, but you can't say it returns a rational number because some rational numbers are not integers.

So the system ought to reject that kind of change. But the much, much, much more interesting thing about type checking was the realization it was actually made in the 1930s. If you design a programming language type system in a very particular way, then it becomes not only useful for expressing types of variables. Traditional thing every type system does is say variable x is of type integer. But if you design a type system in a certain way, then your types can express theorems, like mathematical theorems. The Pythagorean theorem is a cool one. But one theorem you might set up in a program is like the theorem that this function takes

an array of integers and returns an array of the same integers, but the result is sorted. If you express that as a theorem and you follow this system of type theory, then you can actually require that anybody who writes that sorting function to prove that it has actually sorted its result. And so you have types or theorems and values constructed a certain way can be proofs of those theorems.

And nowadays in mathematical literature, you see more and more theorems are being proven mechanically. Mathematicians are proving theorems in a way that is verified by computer to be a correct proof. In the old days of math, people would write down language. If you look at all of Euclid's theorems, it was just language. It was just writing in ancient Greek to say the steps of the proof to convince the reader that the thing is true. Starting in the 1930s, mathematicians moved towards rigorous formal proofs in which there's a series of steps that can be mechanically verified. They're proving things. When mathematicians say they've done a computer proof of a theorem,

what they really mean is they've written a program in a proof language like lean as a theorem prover, COQ is a theorem prover, and there are several others. It means they've written a mechanical proof in that language that a computer is checked so that it's impossible to lie. If you say that you've proven a thing and the computer verifies it, then it's definitely true. This is a feature of mathematical proof languages, but it's also an idea that's making its way into programming languages gradually over time. Our aim for verse is to be the first mainstream programming language that fully adopts that

approach and that technique. And not only adopts it, but it adopts it in a way that's really user-friendly, so you don't have to do that. And the idea of this is that you want gradually more information to be incorporated in the types of variables. The property you want of a programming language is that if your compiler accepts your program and doesn't beep and tell you there was an error, then your program should work. Now, there are all kinds of ways humans can make mistakes there. So that we'll never achieve that ideal. But we can get closer and closer to it by

having more and more language features that enable the compiler to catch more human coding errors and tell the user what went wrong. And That becomes extremely important in the metaverse. The cost of fixing a bug that's made it through to runtime and is in users' hands. The cost of fixing a bug in a shipping program is hundreds of times higher than fixing a bug that you've just observed as you're running your code yourself. When it's running on your computer,

you just fix a line of code and your bug's fixed. When you have to fix it live, you have to release a patch, you have to release patch notes, you have to test the patch, you have to check for all the other bugs that might have been introduced and everything becomes vastly, vastly more expensive.

So the real aim of the verse program and approach is to catch all of these errors at compile time and make the metaverse a very reliable place. Do you see a world where at compile time and make the metaverse a very reliable place. Do you see a world where at compile time, you could prove that the program is correct in some sense of correctness? Proving things becomes commentorially harder as they get larger.

The really important thing about this whole field is that you should be able to adopt the these capabilities gradually and apply it where you really need it. If you're writing something like a cryptography algorithm, that's a good place to prove stuff. If you're writing a data decompressor that's going to be used by an entire ecosystem,

proving that that doesn't overrun memory is actually really important. And a lot of the reason that security vulnerabilities happen today is because in a different language, a compiler could have caught or not caught in C because it just doesn't have this feature. We shouldn't see this as scary. Everybody working in a typed language like C or C sharp or Java is proving theorems all

the time. If you have a variable of type integer and you assign some value to it, you've proven to the compiler that that value was an integer because otherwise it would have rejected it. So as we add more and more advanced proofs, we'll get compositional properties flying out of our systems that they're easy to use and people prefer to use. If we might think in a future where we have

AI helping us write certain kinds of code, the big problem with AI is you ask it to do something, ask you to write a fragment of code that does something. It might give you a perfectly valid fragment of code that compiles but does the wrong thing. And if we had languages where you could say, write a function that sorts this array and prove that it did that,

it could actually write the proof. And if the compiler didn't beep with it, you could trust that it was actually sorting the array. And otherwise you could go back to the AI and say, well, that didn't work. But getting to the point where we know our programs do what we say they're going to do or think they're going to do is a very important thing.

And by the way, I should mention that you sent me a note about Curry-Howard correspondence, which I went down a rabbit hole in it. That's a whole fascinating field, which shows the mathematical relationship between programs and proofs. That's right. This is a result from the 1930s. It's one of the most important results of

computer science that almost nobody knows about. Yeah. But they did this rigorous breakdown of type systems and the 1930s formulation of programming and established that everything you can prove in mathematical logic, you can prove within a type system if it has certain features. And if you break down what is a proof, well, a proof that integers exist is some integer. Five is a proof that integers exist. When you have something like var xint and you say x equals five, well, you're proving

to the compiler that five is an integer. That comes as a secondhand nature, but you can prove more advanced things. If you want to prove that a pair of things are true, like theorem a is true and theorem b is true, then you need to provide a pair of values, one that proves theorem a and one that proves theorem B. And that's the conjunctive law of proofs. And there's a disjunctive law too. And then there's an implication law for proofs. And it turns out that that's really satisfied by functions. When you write a function in a programming language, you're saying, if you give me this thing, I will give you that thing. If you

give me a parameter of type something, then I'll give you a result of some other type. And if you write that by writing that function, you're proving that given one of these things, you can produce another thing. And that's a proof of an implication. And with only like seven laws, you can construct all of mathematical logic in a type system. And one of the important things for programming languages that hasn't been given enough attention is some aspects of programming languages are just subjective. They're just machinations of the programming language designer. You know, Nguida Van Rassom decided that Python should support indentation a certain way.

And you know, as long as you're doing things like human notation and naming of things, there's always going to be that subjective layer. But there are other parts of programming languages that are not subjective but should be fundamental. When you look at type systems, there is a way to do type systems that gives you mathematical proofs. Every other way of type systems that doesn't give you mathematical proofs is just worse and should ultimately be rejected. So I think one of the jobs of computing is to identify what have we actually done right

in the past and what have we done wrong and for everything we've done wrong, actually going back and fixing it. Otherwise we just keep accumulating so much cruft that our systems eventually are crushed under their own complexity. And there have been massive announcements of horrible vulnerabilities in software and services over the past year. Turns out some nation state backdoored a bunch of Teleco's surveillance systems for wiretaps.

Huge problem there. But ultimately when you break it down, it's probably because of some buffer overrun in some C program. These decisions about programming languages have long-term implications. It's really fascinating that in building these systems that hundreds of millions of people use,

you're rethinking about how do you actually build it from first principles. So that should mention that versus primary design goals, it should be simple enough to learn as a first-time programmer, general enough for writing any kind of code and data, productive in the context of building, iterating, and shipping a project in a team setting, statically verified to catch as many categories

of runtime problems as possible, compile time as we were talking about, performant for real-time, open-world multiplayer games. We didn't really quite talk about performance, maybe I could ask you about that in a second. Complete so that every feature of the language supports programmer abstraction over that feature. Timeless built for the needs of today

and for foreseeable future needs, yeah. And then there's some design goals that we talked about that is strongly typed. Multi-paradigm to use the best of functional programming, object-oriented programming imperative programming So it's as deterministic as possible, you know, if you run it over and over it runs in the exact same way No failable expressions as you talked about super fascinating. There's so many cool features in this speculative execution concurrency, maybe can you talk about concurrency like

What is it about verse that allows for concurrency at the scale that you need? This is the one biggest technical problem that we're working to solve in this generation. That is taming concurrency so that any ordinary programmer can achieve it by just writing ordinary code. It's hard. Programming on a single-threaded computer is hard enough, but it is completely predictable.

If you have a language that's deterministic and you run the same code over and over, it's always going to do exactly the same thing and there's no unpredictability about what might happen. You're reading and writing variables in some order and you're always going to see it behave the same. The problem is when you introduce multiple threads or multiple nodes in a data center,

all working together on a single problem, is that they each want to read and write different pieces of data and change the state of the world as they go. And still, almost all concurrency in real world programs today is achieved manually. Programmers are writing this code that might run in multiple threads very, very carefully so that they are negotiating among each thread to get access to data in a way that's going

to give them predictable results. And it's incredibly hard. It's so hard that we've, in five generations of Unreal Engine, every single generation decided we're not going to try to scale up all of our gameplay code to multiple threads manually. It's just much, much, much too likely to go wrong, not only for ourselves, but for every partner company who licenses Unreal Engine and tries to use it for building a game.

It's just a massive foot gun. There's a variety of solutions to concurrency that are all rather suboptimal. One attempted solution was like, just don't try to solve this problem at all. Let's break our program down into microservices. Almost all online websites of massive scale like amazon.com work with hundreds of microservices where different servers negotiate with each other by sending messages to each other. By programmers writing those things very carefully, they eventually get to being able to take your orders

and not make a mess of them reliably. But this is totally not scalable to the metaverse, where you have millions of programmers who are mostly not going to be computer scientists. They're mostly going to be hobbyists and enthusiasts and first-time programmers doing stuff for fun. That's never going to work for them because they'll never be able to envision all the different dependencies between different computations they're running in parallel. But it turns out that there was an amazing foundational

work done in the 1980s that was made very real by a paper on Haskell concurrency. Composable memory transactions is the name of the paper. And it describes the system for transactional updates to programs. And the idea of a transaction is a transaction is a block of code that does a bunch of operations on memory, might read, might write. It might process an order.

It might accept an order or reject an order. It might transfer money between one bank account and another. It might make conditional decisions like, oh, you asked to transfer $100 from your account to this guy's account. We're going to see if you have $100. If you don't, we're going to reject it. If you have $100, we're going to take $100 out of your account and add it to this other guy's account. Without transactions, if everybody's just randomly adding and subtracting each other's bank balances, then you might have somebody read a bank balance, subtract 100, and write it out. But in the meantime, somebody has written something else in the meantime. And so you might get

inconsistent bank balances arising if you don't have a way of ensuring that these all run in a specific order. So the idea of transactions is its way of dividing an entire program into updates, you know, self-contained updates that do an arbitrary amount of computation but must run in a single threaded manner. And in the case of a game engine, that's a gameplay object update. When you're playing Fortnite, you see gameplay object. Every other player is a gameplay object. Every enemy is in the gameplay object. Every rocket and projectile and car and thing you see moving around and interacting, it's not just a fixed static part of the world. That's a separate game object. And each of those objects is updated

at a rate of one update per frame at 60 frames per second. And so then in the course of Fortnite Battle Royale gameplay, you have tens of thousands of object updates happening every frame with 100 players. In a simulation with billions of players, you'd have a whole lot more than that. So right now, that's done single-threaded. Yeah, that's done single-threadedly in each game session. This is why Fortnite has 100 players limitation.

If you absolutely maxed out a server, maybe today, you could get it up to 140 or something. But it's not going to thousands or millions or billions. And so what we need is a technique for magically automatically scaling our code to that. And the transactions are the idea. And the idea is a transaction is a granule of code that runs its entirety.

And so the idea of this transactional memory concept is that we're going to have programmers write completely ordinary code that reads and writes variables in the completely ordinary way, and they're not going to have to worry about concurrency at all. And then the system, like today, a program, a computer just runs your program. There's no amount of speculation going on at the programming language level. The idea of transactions is, since we have a bunch of operations we need to know, we apply a large set of them concurrently,

but instead of each one reading and writing from global memory shared by all, in which case they might be reading and writing and contending with each other for the same data and might be doing contradictory things to it, we're gonna track all of our writes locally. We're not gonna write data, we're not gonna write changes out to global memory.

We're gonna keep track of it in a buffer that's just for that one transaction. So we're going to be... It's going to look to that code exactly as if it's running on the global system affecting global game state, but it's going to be isolated to just that one transaction and it's going to be set aside and buffered up for consideration later. We're going to run tens or hundreds or thousands of the updates concurrently. We're going to see which ones had read-write conflicts. Because if two transactions don't read and write any of the same data, then you could have run them in either order or

simultaneously and it wouldn't have changed the end result. Yeah, the order doesn't matter. This is so fascinating to imagine this kind of system and arbitrarily concurrent running millions of updates in parallel of gameplay objects. That's the thing that enables the thing that we're talking about, which is tens of millions of people together in one scene. Yeah, exactly. The key is that you're running these updates speculatively and you're not committing their changes to

memory until you're sure that they're free of conflicts. So you might update 10,000 objects. You might find 9,000 of them were conflict-free. So you apply those 9,000 updates to memory. They could have run in any order and it wouldn't have changed the result. Now there's a thousand objects left over. Now you have to run those again, try them, maybe interleave in a different way to get them to eventually commit to memory. And in the meantime, you just throw all their computations away and redo them later. And by doing this, like removing this from being a programming problem for the programmer to deal with to being a language problem for us language designers to deal with. And we're moving a vast amount of pain

that would be imposed on a million people instead to a vast amount of pain imposed on a small number of people have to actually make this work. That's amazing. That's really incredible. So what's the state of things with verse? And I guess what you're outlining is if, and hopefully it is, successful, this would be a big part of Unreal Engine 6.

So what's the timeline? Where do we stand today? Well, there's a lot going on in parallel. The key thing with Verse is that we have been specifying the, like what we think is the ultimate version of the language with all the features we want. Whereas we've been shipping more modest versions of language over time. And we've released shipping more modest versions of language

over time. And we've released dozens of updates to it over the past year and a half. And the idea is that the shipping version gains more and more features over time, but each maintaining backwards compatibility with old versions and each continuing to improve and approach the ultimate version of it as we go. And we've been doing this experiment

entirely within the world of Unreal Editor for Fortnite for now. We want to test this and iterate with Fortnite creators in just the metaverse usage case before we make it available to all of our partners using Unreal Engine for all of their projects. And the idea is to iteratively improve it and build it out because right now, UEFN has relatively few features for programming. It needs a lot more.

And everything we add makes the world a much better place for Fortnite creators. And we're adding major, major new APIs every few months throughout the course of this year. Whereas Unreal Engine licensees who are building standalone games already have access to the full engine through C++, they have massive, massive expectations of an API.

And so we can't release this to them until we've built up all of the essential features that they'll need for building their gameplay in the future. And so we have these two different tendrils of progress. There's Unreal Engine 5 for game developers, and there's Unreal Engine 5 targeting the Fortnite community. And there's different bits of development

that are only in one area of it that aren't applied to Breath. Like not all of the Unreal Engine 5 features are actually available in Fortnite, because some of them we haven't figured out or haven't gotten to the point where we can deploy them to all seven platforms in a platform independent way. And so the place where all of these different threads

of development come together is Unreal Engine 6. And it's a few years away. We don't have an exact time frame. But we could be seeing preview versions of it, perhaps two to three years from now. And we're making continuous progress towards it. So that's really nice. So there's this ultimate version of a language

that you're constantly working on and thinking through. Then there's the shipped version of the language that's used by a large number of people, but still in the constrained environments of the Unreal editor for Fortnite, so for the Fortnite game. And then there awaits the more general Unreal editor, Unreal Engine, for the lessons learned in the Fortnite context to be integrated in the more general

context of creating simulated worlds for all kinds of games, including Fortnite. It's a really nice setup because you're both, it's a testing ground of the language in Fortnite and you're keeping an eye on what the ultimate thing will look like also necessary to deliver all the features that we mentioned. Brilliant. You know, the aim for UE6 is to bring the best of both worlds together. Much easier gameplay programming for the Fortnite community and for licensees. More scalability to large scale simulations of all sorts.

Greater ease of use, meaning it will be easier to hire programmers who are familiar with and experienced with the thing. But also ensure that every game developer has the full deployment capabilities so that it can build a game once and then ship it anywhere. The ultimate version of this enables a game developer to build a game of any sort, either or simultaneously both ship it into Fortnite as a Fortnite island that

players can go into, bring their Fortnite items and cosmetics and interoperate properly, or ship as a standalone game, or both. And if they ship as a standalone game, they shouldn't be missing out on the open economy either, because in this time frame, we'll have opened up the Fortnite item economy to third-party developers of all sorts. Hopefully, they're a standards body, but there might be multiple phases of it so that if

you choose to ship a standalone game, you can still choose to have Fortnite items work in your game and have your game items work in Fortnite and have your item economy integrated with the overall metaverse economy and solve the really core problem of the game industry that Matthew Ball has been documenting over the past few years. Yeah, by the way, Matthew Ball has been really helpful. He's a great, he wrote a really great book that I recommend people check out. There's an updated version.

Let me just ask for it, because again, there's a bunch of indie developers listening to this. I saw that a lot of solo developers out there, they're using Unreal Engine, that they're basically creating video games solo. I saw Can highly recommend it's great choo-choo Charles It's a great video game Gavin Eisenbeis he a great guy. He solo created this game. That's I think quite popular

I believe he says he used visual, he didn't even use C++, he used visual scripting, he used blueprints to create it. Okay, so I mean all that to say, people should go check it out, support indie developers, support Gavin, support everybody like that. I think it's important to say, because there's so much genius and artistry out there

that we wanna support the crazy dreamers out there. Anyway, all that to say, what are the ways you think Epic can support indie developers like that? People like Gavin, give them superpowers to create games from which they can make, at the very least, enough money that they can keep doing their art. Yeah. Well, that's really about productivity. Because to be successful with a game, you have to have a great game.

If you're building a type of game that nobody's ever built before, you might be able to build a smaller, simpler game than if you're competing in a massive genre that has huge expectations. But it's all about enabling somebody to do that in a reasonable amount of time that they can spend and to be able to finish it and ship it and maintain it successfully. The tools are a big part of that, having the tools be as productive as possible. There are a lot of other facets as well, like having a content marketplace is a big thing.

Just off the shelf, piles of content, some free, some paid, built by other creators can enable a small indie team to build a big game and just be able to focus on the unique content of the game, being able to write their gameplay and lay out their environments the way they want, but not have to build every tree and rock, you know, because somebody's already built one, and theirs is probably perfectly suitable for your game.

And over time, they'll be more and more. You know, there's be more and more. There's also a lot of indie developers living as content creators. They'll be releasing content on Fab Marketplace or the Unity Asset Store and earn a living for that. But specialization of labor is a really valuable thing. In the early days, pretty much one person would build one game. That's how a lot of the games were built in the 1980s.

Over time, you had a separation where artists became specialized and then programmers. And then gameplay programmers and engine programmers. Now you have technical artists. And you have dozens of different specialties contributing to a AAA 3D game now. And the more we can modularize those bits of content, so you could get something off the shelf

rather than having to build it or have the engine synthesize it for you. The more we can enable creators to create stuff fast and successfully. So we should talk about the fact that amongst many other things you've been philosophically and spiritually battling monopolies in general. Sort of one of which is sort of the Apple marketplace that charges 30% from developers. Can you speak about this, this idea that you believe that Apple and other companies

should not be charging that kind of revenue cut. Sure. Let's start from a very basic principle of computing. The first computer I owned was an Apple 2 Plus, designed by Steve Wozniak and marketed by Apple and then an IBM PC. In those days, anybody could write code. Your computer literally turned on with a programming language prompt in front of you. You had to actually do work to not write

a program and to instead run somebody else's program. That was incredibly empowering. Anybody could write a program, anybody could put it on a floppy disk, anybody could share it with their friends, anybody could make copies of that, put it in a store. They could sell it, they could build a business around it, and they were completely able to, without seeking any big tech corporations permission, do whatever they want, even from IBM.

Remember, IBM was the dominant computer company on earth at the time that they released IBM PC as an open platform. And you know, so it's really been firmly implanted in my mind that this was a magical and wonderful time of unmatched economic progress for technology in the entire world. Over time, the big companies have realized that they could shut down and just block software makers from releasing software on their own and block software makers from doing business with customers directly. I've always viewed this practice as terribly abusive because when you buy a computer or

a phone, you spend good money on it. It's your money you spent on that phone, and now you own that phone. And there's absolutely no reason that Apple should block you from installing apps from other developers directly, if you want, going to their web page or writing your own apps without their permission and running them yourself without having to get a developer account, without having to go through their bureaucracy.

And there's no reason that any consumer who gets an app shouldn't be able to do business directly with the developer or the consumer. You already bought that phone. Why should Apple be adding a 30% junk fee to all commerce you do? And why do they selectively apply it to some things and not others? I've always viewed this as deeply abusive and that it shuts down the competitive engine that once fueled the app and software economy. It's still a vibrant competitive engine on Windows and on the internet, but it's no longer

with mobile apps because these stores have popped up and they don't provide any useful value to the user. Yes, they're a search function defined software, but there's no reason other companies couldn't build a better one. And I bet if you had Steam or if you had Valve build Steam for iPhone, I bet Steam for iPhone would be a much better app store than the iOS app store and a lot of people would use it. And that Apple would be forced to build a better app store in competition and that everybody would improve their products as a result. But you know, Apple and Google shutting down the competitive engine that drives the software economy has massive implications for everything.

One of them is reshaping the nature of mobile apps to be really offensive to game or sensibilities. If you go on console, the best console games you see listed on the storefronts, the best console games that you see reviewed are awesome games that really have a lot of creative merit. The ones that sell the best are really enormous values for their money and are the product of an immense amount of work. You don't see that on iPhone.

The top apps on iPhone, the top games on iPhone at almost all times are these ridiculously greedy, high monetizing, you know, whale games, which are pervaded with pay to win and loot box practices. You know, they have a sort of a legalized form of gambling. And, you know, these games are not driven by fun. They're driven by manipulation of the players to greedy ends. by manipulation of the players to greedy ends. And it's very hard for the fund-based games to actually succeed there. And the cost of operating these online games now are enormously high.

So you have a game that's based on fun, it's not loot box heavy. You have to pay 30% of your revenue to Apple in order to just get access to the platform. And 30% is way, way, way more than most going companies make in profits right now. So if that fee is more than the profit from a natural company, then they can only stay in business by raising prices. So these 30 percent fees are raising prices of all digital goods.

It's just inflationary as a force in the economy. That's just the first drag tax. But then to reach users, when a user searches for, before Apple blocked Fortnite on iOS, when a user searched for Fortnite, the first result was always some competing game. That's utterly anti-user. You search for Steam for a game, and if that game's on Steam,

it's the first result always, because Steam's not getting enshitified with advertising. Apple is. And they do that so they can make even more than 30%. That's the first result, always, because Steam's not getting inshitified with advertising. Apple is. They do that so they can make even more than 30 percent. If you want to be the first search result for your game, you're probably paying more, like 45 percent. If you want to reach users on social media, you're paying another 20 percent.

So literally something like 70 percent of the revenue for your game is just going into junk fees to acquire users and get them in your game. It's just going into junk fees to acquire users and get them in your game. And the money that's left over is only enough to fund these games with rather abusive practices that do not look to normal gamers like games for the most part. Now, there are some exceptions. There are some great games on iOS and there are some games with good practices. But the engine has been really corrupted in a way that competition would fix. If you unleashed lots of competing stores on iOS, then you'd have lots of awesome options

and you'd have much better deals and much better prices. I had a quick chat with Matthew. He asked me to ask you this question of, why don't more companies fight Apple in the way, openly and totally as Epic has been? What makes you, what makes Epic so unique in this regard. And I should say, I think everything you said I agree with fully. I think what Apple is doing is just wrong.

I think Apple in many dimensions is an incredible company. They have brought so much good for the world. In this regard, I just think it's straight up wrong what they're doing. They're not providing the value of 30%. And even if they were, the monopolization, the centralized control without competition is wrong. Anyway, why are you fearlessly fighting Apple on this?

And other companies don't seem to want to step up. All companies are terrified of Apple because Apple can destroy their business. Epic was in a unique position with Fortnite, first of all having the biggest game in our users playing on PC and console meant that if we lost access to iOS during a fight, then we would still be able to survive. That set I pick apart. Spotify, Facebook, you name the top 10 mobile apps, I think none of them would be able to survive without Apple. Like literally their business would be destroyed if Apple blocked access to them.

And Apple is incredibly clear with developers that they're willing to deprive all users of access to any app if they get in a fight. And if you look at how they dealt with Epic, they were not just legally maneuvering with the intent of winning the court case against us, they were also sending a message to all developers in the world, we will destroy your business or we will try our best if you fight us.

A very small number of vocal developers have been willing to speak up and Apple was actually refrained from crushing their businesses when they weren't violating any Apple policies. And that took a bit of discipline, which I think is also an amount of calculation by Apple that they couldn't survive being seen as the company killer. If you criticize this, we'll crush your company. But the other thing that Apple has that they can and will readily deploy against every developer is soft power. When they take 30% and advertising is so expensive, soft power by Apple, like approving your updates

faster or slowing down all of your updates by a couple of weeks can also have a dramatic effect on your ability to compete successfully. In Apple, it's a very long history of playing cat and mouse games with developers. A developer isn't in Apple's good graces, so just slow down the updates. So they've been slowing down updates for several major tech companies, sometimes for weeks, sometimes for months,

without all going under the radar because everybody's afraid to challenge them publicly. And so Apple's wielding a soft power can change a company's economics for the worse, enough to deter almost any public company. Epic is in the fight because I firmly believe that something like the metaverse will only arise. It's something like a billion plus user,

real-time 3D social ecosystem that grows to encompass potentially all or most major games by all major developers tied together into an open economy where they all participate as major games by all major developers tied together into an open economy where they all participate as peers and they all compete to give users the best deals and they grow and you know do business with their customers directly. That thing can only exist if the Apple and Google gatekeeping monopolies are lifted. And it's not just the 30% fees. The 30% fees are economically ruinous but they impose other levels of control. Apple prevents all web browsers on iOS from implementing web standards better than Apple

does. So Apple has really limited data storage capabilities and 3D graphics capabilities on the iOS web APIs. So APIs you can access from web apps running within a web browser. And that's to intentionally cripple those apps to ensure that they can't possibly compete with native apps. And by depriving web apps of those features,

they prevent web apps from being competing with native apps. Well, Apple, if they treat the metaverse the way they treat the web, they'll say you can only use Apple's metaverse engine. Unreal Engine is disallowed. And then they can impose all of their own limitations on the metaverse to force all commerce through Apple or force it to be so uncompetitive and lousy

that it can't compete. And they have this giant array of these anti-competitive techniques that they use to disadvantage other app developers, saying only Apple can build certain kinds of apps or only Apple can integrate certain features in Europe, even where the DMA law requires Apple to allow competing stores.

They say, a store can only be a store. You can't build a store into Facebook. You can't build a social network into a store. A store must only be a store because a store that's more than a store might be able to compete with us more effectively. It's just a giant, you know, to use the Soviet term, it's a defense in depth strategy where they've constructed a massive series of barriers. Each are fatal to any attempt to compete so that even if one barriers

overcome, the others remain in place and shut down the whole scheme. And that's playing out in Europe where Apple's enabled us to launch the Epic Games Store, but has made it so difficult and uncompetitive both for Epic and for clients who we want to do business with that it has no chance of success until the European Union starts to really enforce the DMA law and impose harsh and serious penalties on Apple to force compliance. I think it should be said, and once again, I think it's wrong what they're doing there,

and I hope there's public pressure and government pressure for them to open up the platform. I believe, as a person who loves Apple, I believe this is also good for Apple. There's the natural thing in companies to want to close and control and crush competition, but like Apple is full of brilliant engineers, open it up and win. It's going to create the right kind of competitive incentive to make the Apple store better, to make, you know, to, to cause. Because they're creating great interfaces,

but competition will sharpen the sword. It's just going to make everything much better. So I do hope there's a lot of public pressure, and I deeply appreciate that you're speaking out in this way, putting that pressure and letting people know. It's okay to say that this is wrong. Thanks. Competition makes everybody better. You have a monopoly that's forced to compete,

suddenly the monopoly's products get much better. The offerings to consumers get much better. You see so many areas where Apple could be the best, but what they have is just really, really lousy, and it's this old guard of leadership who is clinging to these old policies, turning themselves into the enemy of every developer, every regulator. And I think it's ultimately massively to their detriment. And I can't wait for a new generation to come in and paint a bright path to the future.

Epic was an awesome partner to Apple for more than a decade of demos and partnership and technology usage together. And we did amazing things together. Love nothing more than to have that Apple. Bringing back Steve Wozniak's original views, the Apple II was such an amazing thing. It's completely open platform. The manual to the Apple II included a listing for all the ROMs,

the source code to the ROMs. You could understand exactly what was happening there and you could learn from it. It included a hardware schematic of the entire computer. So you could learn how to make a peripheral and plug it in in an open ecosystem. That's the awesome Apple. That company would be the best company in the world again. I think the current one is just on the wrong side of history and needs to change. Well, I hope Epic and Apple find a path forward together

and flourishing together and Apple embraces competition better. One of the things I admire about this conversation that you mentioned Steam a bunch with kind words, supportive and basically never mentioned Epic Game Store. I love that. So I really love that. It really embodies the fact that you want variety,

you want freedom for people to choose the best thing, and in so doing create this large network of humans interacting freely with each other. Okay, that said, one of the competitive pressures that Epic has created a few years ago was by launching the Epic Games Store. And instead of Steam's 30% revenue cut, you went with 12% revenue cut, creating the competitive pressure saying, you know, listen, this shouldn't be that high of a cut. And which I thought was like amazing.

This is a brilliant idea and I think it still is a brilliant idea. It's wonderful. Now in preparing for this conversation, I looked on the internet and I saw there's a lot of criticism of EGS, Epic Games Store. First of all, I should say, the internet is full of drama and criticism. Like, there's just not enough celebrating of awesome shit. If I can ask the internet as a blob one request, can we just celebrate awesome shit and also criticize? But just like, there's not enough celebration.

Anyway, the two directions of criticism is just straight up the launcher interface is clunky and lacks a lot of the features of Steam. And then the second set of criticism is the exclusive contracts, which were made with some of the games that are on Epic Games Store. So first, huge props on the 12%. Maybe you could speak to the vision of that. And second, can you comment on those two criticisms? Sure.

Yeah. I think one of the reasons that people characterize the Epic Games launcher as clunky is because the Epic Games launcher is clunky. We need to improve this. There's a lot of work going on there. I wish we'd gotten better at addressing quality of life features and prioritize them above all of the other features. Because Steam has 15 years of built-up work

by many of the best programmers in the whole industry working on that, a much larger team working on Steam, and a lot more time working on it. And so we've had to make a lot of prioritization decisions about what do we support with the Epic Games Store and when. A lot of the time, it's been supporting commercial features like merchandising, offering multiple versions of a game for sale and offering upgrades from the regular edition, the deluxe edition

and other things that partners work. Other priorities have been quality of life and launch or load times and other things. We've not put enough emphasis on the quality of life features. We've recognized this very clearly multiple times and we've gone through multiple refactorings. But that's definitely been a disappointment to us and to a lot of users. And I think one thing it took us a while to realize was it's not in uniform.

Depending on your proximity to a CDN and the size of your game collection, it can be either awesome or really clunky. And the users for whom it's really clunky are the people, like, I think, who are a large part of the complaints. They're going to speak up. And I should also say that the Steam launcher, for a long time, from my memory, but also just looking online,

was also very clunky in the beginning. Yeah, and one of the criticisms of Epic Games Store from the beginning was you don't have all of the features of Steam, but we very much don't want to have all of the features of Steam. Like, Steam has forums dedicated to your game, and we decide we don't want to create forums, and our partners, when we talk to them,

generally didn't want us to create Epic Games Store forums for their games because there's already channels that they prefer to them. There's social media and a number of platforms, and there's Reddit, and there's lots of places for gamers to discuss their game, and they prefer those discussions to be there. And so it's very much not our goal

to mimic everything in Steam. But we do want to have all of the convenience features that makes it easy and fun to use as Steam. So there's a long journey ahead. But we continue to reinvest in it, and we're working to build a multi-billion dollar business there and think we'll succeed. Arty, the Epic Games store, supports an immense amount

of Epic Games commerce and Fortnite on PC, now on Android and iOS and the European Union too. So it's a forever facet of the industry, and we are never losing heart in it. And we think at some point, you know, I really feel that the benefits of the Epic Games approach are gonna outweigh the benefits of the Steam approach, especially as gaming becomes multi-platform.

One of the things that really sucks for all gamers is that, you know, you have a lot of friends in the real world. Some have, everyone has different platforms. Your Steam friends aren't connected to your Xbox friends, and they're not connected to your PlayStation friends, or your Nintendo friends. And so you're very much bottling up PC gaming

into a hard core group of PC only folks, and making all the other aspects of it difficult. A lot of games have flocked towards Discord, which is a mess in itself. Now your Steam name is not your Discord name, and that's not your PlayStation name. Now you have two people in a game, and they have four different identities, and that sucks. Our aim for that is, with Epic Online Services and the social systems that we built for Fortnite, opened up to all developers to have cross-platform social features be super easy

and free for all developers. This is not something we're trying to gatekeep or rent seek on or lock people into. It's just a way that we're making social gaming easier for everybody. As more and more games follow the Fortnite approach of being multi-platform, especially multiplayer games, Metcalfe's law is a very real phenomena in the industry.

It's the thing that's upending some games and causing growth in other games. It is the number one trend for pervading the world of gaming today. It says that your game is quadratically more valuable the more percentage of a user's real-world friends they can connect to. Your game vastly benefits by connecting all of its players together and not segregating them off into different online platform populations and so on. And so I think the future trend is in that direction. I wish Valve had opened up Steamworks to just work on all platforms. They could have easily done it. We did it.

But they seem to be using it as a lever to keep people locked into the Steam PC game store. And that's going to be a long-running battle, because there's always a very toxic group of Steam users. They even created an entire subreddit dedicated to criticizing Epic on our store. And they create, basically, harassment campaigns at times against developers who use Epic Online Services. Developers do that so they can connect their players

across platforms and have friends across platform and voices across platforms. Suddenly that's trying to be turned into a negative. It's clear that Epic wants developers to win, wants gamers to win, and wants Steam to do awesome also. And in the competition between Steam and Epic Games Store, like, create awesome stuff together. I mean, there's just, it's like, it's obvious to me if you don't read the stuff online, but online it's like there is this just negativity that I don't think is constructive in general.

I should give a big sort of positive thank you and props for the push to multi-platform that was always there for Fortnite, perhaps before the pressure that Epic created on breaking the barriers of Xbox and PlayStation and PC and being multi-platform. Like, I got a chance to play with Fortnite a little bit with you and all the people in the group. By the way, awesome interface, audio chat, really fun. But you could see like a couple of PC folks, a PlayStation person, an Xbox chat, really fun. But you can see a couple of PC folks, a PlayStation person, an Xbox person,

all together, we can't really tell what they're using except for a little icon, and it's nice. It's like all those barriers that we've created with these platforms are gone. And you creating the pressure with Epic Games Store and just everything you're doing with Fortnite platform, it's really nice. There's no reason to create these silos because ultimately you should put the gamer first and let everybody interact with actual real life friends and make new friends across the

entire network of humans. So anyway, thank you for that. Thank you for creating that pressure. Thanks. Yeah, that was an interesting time. Sony had a long running policy preventing cross-platform play. We had a long series of conversations which got pretty harsh towards the end. But Sony ultimately came around and they opened up PlayStation,

and through a series of private conversations, they did the right thing. Not only that, our partnership with Sony has increased since that argument back in 2018. We've gotten closer and closer and done ever more things with Sony brand IP, like the characters from God of War and other games coming into Fortnite and all kinds of crossovers, massive Unreal Engine adoption in Sony for making games, for making movies at Sony Pictures, music partnerships with Sony Music.

That's been an absolutely wonderful relationship. I think that stands as an awesome example of a company that, because of historic reasons, got stuck with a policy that no longer made sense for the future. And following a serious discussion with a close partner, righted it and did an awesome thing and now Sony is much better off and Epic is better off and all game developers are better off and the coal console industry, I think it's a lot stronger now than it would have been if these silos had continued playing out.

And despite the kind of potential concern that like maybe blocking platform play with Xbox gave Sony an advantage, Sony has actually grown in market share relative to Xbox since that time. And so you can't say that anything but good, goodness came of that time. I think a better version of Apple would have received the email I sent to senior Apple management and been like,

huh, there's an issue here. We should have a discussion. We should reconsider this. We should listen. And, you know, they didn't. And that's why we're in the midst of a five-year battle with Apple and in, you know, the hopefully still the early days of a 15-plus year partnership with Sony. Come on, Apple.

We love you, Apple. Do a little bit better. The second line of criticism that I mentioned, the exclusive contracts with some of the games. Can you just speak to that? Because in so much of the journey of Epic, you've been sort of against exclusivity. Let's back up and talk about the principles at work here. Apple forcing other companies to use their payment service is a cursive decision by Apple. But if Apple convinced other developers to use their payment service by offering benefits

or a better deal or funding or any other positive incentive, then that would be perfectly fine. One is preventing competition, and the other is actual competition. Epic has never forced any developer into any sort of exclusivity relationship. Rather, we've offered developers payment or incentives or marketing or any number of things of value to them in exchange for coming to our store exclusively. And it's their game.

So it's entirely rightfully up to them to decide how to distribute it and to make decisions about their business. It's their game. If they want to distribute it through Steam, they can. If they want to distribute it through Epic exclusively, they can. If they want to distribute it through both, they can. If they want to distribute it through Epic exclusively, they can. If they want to distribute it through both, then they could do that as well. If we pay them money or other things of value in exchange for them coming exclusively to the Epic Games store, I think that's their right. This is an example of Epic,

an underdog with a tiny fraction of Steam's market share working to proactively compete with Steam by offering a better supply of games. And some consumers who prefer Steam might prefer that the game be on Steam, but the developer in each case has decided that they believe they would benefit more by doing this exclusive deal and exchange for benefits than by being on Steam. And you know, like one of the key exhibits in the Epic Google trial was its opening exhibit, which was trying to point out to the jury in the trial the benefits of exclusives.

Like, imagine a new store popping up. The store has a big sign outside of it. We're the new store. We have everything that the other store has, and it's at the same price. Are you going to go to the new store. We have everything that the other store has and it's at the same price. Are you going to go to the new store? No. Nobody's going to switch from Steam if Steam has all the same games as the competing store and everything's priced just the same. And so we looked at initially two ways of competing with Steam strongly. We wanted to sell games at a better price than Steam. By agreeing

on the amount of money we pay each game developer, you know, if we're gonna if the game's gonna sell for $50 and we take 12% we'd actually lower the price and lose potentially even lose some money to offer a better deal. Well, you know, we tried to pursue this but very quickly every developer told us that they wouldn't agree to better pricing because if they did, then Steam would stop giving them marketing featuring and benefits and the console makers would be mad and all their relationships would be harmed. So there's an undercurrent of powerful platforms and ecosystems encouraging developers not

to compete on price. So not being able to compete on price, we decided to compete on supply by doing exclusive deals and we signed a lot of them, paid developers lots and lots of money. I think we distributed over a billion dollars in that expenditures to developers beyond the money, the revenue we actually made from games in order to get a whole lot of exclusive games. Some are successful, some weren't. Borderlands did awesomely on the Epic Games store and we and Gearbox felt that it did just as well through Epic as it would have done on Steam because the players who wanted Borderlands wanted Borderlands and they came and got it.

Whereas a lot of other games, some smaller games especially that didn't have a dedicated audience that was absolutely going to play the game. Typically benefited from exposure on Steam, they were reaching an audience that wouldn't have reached organically. And so some of them in the end, we and they concluded that they did worse by being on the Epic Games Tour exclusively in terms of reaching fewer customers. And so, you know, we had these limited time exclusives when they ran out. They put their games on Steam and lots of data was gathered to understand what worked. So this worked well for some games,

didn't work for other games. But companies seeking to compete, especially underdogs seeking to compete, have to offer some unique value, have to offer something that's not available through the competitors. And I get that Steam users who just prefer using Steam and buying games on Steam, want to have their library in one place, don't like this.

But you're never going to have competition for better deals if you don't support the competitive mechanisms that allow competitors to come about. I think if Valve were forced through Epic Games Store's success to compete with Epic Games Store, then developers would be getting a better deal. Consumers would be getting a better deal. And these 30% fees would be driven down quite a lot towards the actual costs that are required to support the stores. Yeah, I mean, there's a lot to be said there. You know, I've gotten to watch Spotify try to do this with podcasts, you know, enter as the underdog into the space and try to attract

You know they made exclusive deals with for example with Joe Rogan Where the podcast would only be published on Spotify. I Personally think long term what I would love to see for EGS for Epic Games Store is to not do any exclusivity for EGS, for Epic Games Store, is to not do any exclusivity. Similar to what Spotify's doing now, even with Joe Rogan, they let go. It's wide open. And instead compete on the space of just

the non-clunkiness of the interface. Because the foundation of what Epic Games Store represent with 12%, it's just philosophically. So you're also competing on the sort of spiritual realm of like what it stands for ethically. That's also a really powerful way to win. So now that there's enough number of people using Epic Games Store, like to drift

away, to move away from exclusivity. It's understandable that it's needed for the competition, for the underdog to enter the scene. But it goes against the sort of the freedom, the free spirit of choice that I think you represent a lot of the decisions you've made, which is making the games cross platform and just, yes, giving freedom to the developers, giving freedom to the gamers to choose. So in that way, I think exclusivity a little bit goes against that.

Well, here's the conundrum. The exercise of soft power by all of the competing stores has made it intractable for almost any developer to offer a better price through the Epic Games Store than through Steam. You can imagine that if the effect of Epic revenue sharing 12% to developers was that games just cost 22% less on Epic Games. Sorry, 18% less on Epic Games store, that that would

actually start to reshape consumer behavior significantly. People would start coming here for the better deals. But I feel like Steam giving developers nasty phone calls and so on when they propose to do that prevents developers from passing on savings to consumer. Then what's the mechanism that drives users away from the incumbent store to the store that offers a better deal? If basically developers are fearful of competing on price through stores, what can possibly be done to get a dominant store with something like 90% of revenue share among multi-publisher stores in line so that a much,

much smaller store can compete? I think some answers are required there. A better UI is great. Steam is super polished. Epic Games Store and Time will hopefully be as polished. How does that overcome the fact that your entire library over the past 15 years is there? If developers have been afraid to exercise their own economic interests, because it's in a developer's interest to sell on Epic and get 18% more of the revenue, I think there's a real power to incumbents. It's very hard to overcome

through just being there and being as good. Ultimately, where I hope it converges to is less exclusivity and where the competition can be the kind I love the most, which is on the The competition can be the kind I love the most, which is on the UI, on the experience, and then on the Steam side on the 12%. So it can go from 30% and start to support the developer by lowering it from 30% closer to 12%. Anyway, I'm a big supporter supporter and I don't like the criticism of Epic Games Store. But I also have to say that I don't love the exclusivity, but I understand.

I understand the reality of the world is that you have to have some mechanism to get people to switch or not to switch, but to at least get some of their games to try out to experience to allocate some of their library to the underdog. So totally understand and hope the UI keeps improving. Thanks. One more bit on that exclusivity point is that when we told Google that we are going to launch Fortnite outside of Google Play and go into competition with them, they viewed exclusivity as such a powerful competitive force that they went around to the top 30 publishers and paid out hundreds of millions of dollars to them in order to agree not to do exclusive deals with competitors.

And that was called Project Hug, H-U-G, hold developers close. And that was one of the major pieces of evidence on which the jury found their practices to be illegal and anti-competitive. And the one more data point on that, you know, we talk about 30% and there's always a lot of people defending Steam. Well, of course, they have more costs because they have more features than Epic. We have data on that that's very detailed.

The all-in cost of operating the Google Play Store, stocking it, maintaining it, the software, the entire ecosystem is around 6% of revenue. So in a competitive market, would a company whose cost is 6% be able to charge 30%? Absolutely not. And Apple's costs are similar. Apple runs an even more efficient and lean operation than Google, so their costs are also likely in the range of 6% all in.

They market up from 6% all in. They market up from 6% to 30%. Like only a monopoly can do that. Look at competitive businesses. They have a margin of a few percentage. The numbers there are strikingly supportive of just outright anti-competitive market distortions. Okay. What do you think is the future of the gaming industry? So we've said to me a bunch of exciting stuff about indie developers. So do what are called AAA video game companies,

so these big gaming companies, do they have a future? What is their role? How do you see like in the next five, 10, 20 years, the evolution of these big companies and indie developers? Yeah, there's one constant in gaming that I think the industry manages to lose sight of from time to time, astonishingly, and that's fun. When people play games for fun,

our whole job is to deliver fun. When you look at a lot of the games that failed recently, they just didn't deliver fun or they didn't deliver fun in a manner that was nearly competitive with the other sources of fun just in people's lives. At a basic level, we don't need a terribly complicated theory to explain a lot of the malaise in the game industry.

There's been a degradation of the capabilities of a lot of publishers, partly because of competition for talent. Companies like really vibrant game businesses like Epic or Riot or others are hiring the best developers and accumulating them. And big tech companies are hiring the best game developers because there's super talent there.

And so in some cases, the companies aren't competing robustly or getting worse. They're making games that are less fun. I think everything else that's happened is a side show to that. There's always political drama and so on. But I think the core is a failure to deliver fun. The nature of fun is changing. It turns out that playing a game together with your friends in

a really socially engaging way with voice chat is just way more fun than playing a solitary game for the most part. There are exceptions to that. But I think we're seeing much, much more playtime shifting towards games you're playing together with your friends, and not just random Internet strangers who happen to play that game too, but the people actually know in the real world.

That's certainly been the case with me and with almost everybody I know who's playing Fortnite or similar games. That has really significant effects in reshaping the whole game business. A single-player game, if you have 20 people with 20 different opinions of which game to play, each one might buy a different single-player game. But in a multiplayer game, if there are 20 games out and each one might have their own completely individual preference and each one were independently choosing which game to play,

each one might buy a different game. But they're all realizing that they want to play together. What players are doing increasingly is playing a game they like and accept together with their friends, even if it's not the game that every one of them might be preferring to play themselves. That's certainly the case in different Fortnite groups I play with from time to time.

It's like one player might have been preferring to play COD, one might have been preferring League of Legends, somebody else, something completely random, but it's just so fun to play together, we're doing that. That means that there's really strong Metcalfe's law effect in which games which are able to attract a large percentage of your friends are more able to attract you, and not only attract, but also retain. I think Matthew Ball's analysis of this over the years has really documented the trend towards,

you can call it the meta know, you can call it the metaverse or you can call it large-scale multiplayer social gaming. He's really documented this trend and over the past year or so it's taken a really, really strong turn towards increasing rate of change, increasing numbers of players coming to Fortnite. You know, we hit an all-time high of 110 million monthly active users about a year ago. That's crazy. And another close to peak this time. Roblox is bigger than ever, and this trend is players consolidating into multiplayer experiences that play together.

And we're seeing another trend overlaid with that, which is when an awesome single player game comes out or a smaller multiplayer game comes out, people often will treat it as a vacation to go off and play that game for a while, then come back. I think Wukong was an awesome example of that, a wonderful game from a brilliant team. In China, they made a game that Western players had really seen that type of thing done before, and it was awesome and it did well. But most players play it for a while and move back on.

That can be lucrative, but a business that's building that kind of game is it's gonna have to build a new one every few years and build a business around that while the other games continue to create users. But when you have a large number of gamers migrating to a small number of games, the effect of that is increasing revenue for those games, increasing reinvestment. And there are things that Epic can do with a team of

thousands of people building Fortnite internally, and tens of thousands contributing to Fortnite as independent creators. There are just things that can happen with that level of investment that can't happen in a smaller game. There's somewhat of an increasing winner take all dynamic, where the biggest games reinvest more to make their games more fun, they gain fun at a faster rate than other games,

and the industry is changing around that. I think the lesson for the game industry now is that there are really two big opportunities being pursued. There's big games or games that have the potential to be really big multiplayer experiences that keep players around indefinitely for very long periods of time. Then there are just really good single player and small-scale games that people are

taking a break from the big games for. The trend there is going to be towards efficiently developing those games. You can't build one of those games with a $300 million budget, but if you can do it with a $40 million budget, you can make a lot of money. I think that's the main reshaping going on. I think that it creates a rather bleak outlook for a lot of the category of single-player

games that don't have a huge audience to reach. But this is just one of the really trends of restructuring the business around the technology and changes of the day. Okay, this is going gonna be a ridiculous question, but aside from the games you've created, what are some of the greatest video games ever created to you? Like what video games have been like

either impactful to you in your life or maybe you've seen created and you're like, huh, that's a beautiful art piece. Like it could be in a totally different realm. Like obviously for me, I returned to often to the single-player domain of role-playing games, of the Other Scrolls series, Skyrim. That was like a world that they created.

A recent game, Baldur's Gate 3. That was really incredible piece of work and art, and doing a lot of innovative stuff, again, in the single player domain. Is there games like that outside the ones you've created? I'm most impressed with the games that have created what appears to be a full living, breathing world. Games that give you the sense that you're just a part of it and there's a lot more happening and there's always more. It gives you the sense that you could go anywhere and do anything. Even though these games really do have finite limitations and there are places

you can't go, creating that sense of wonder is just a magical thing. Like, Soda Breath of the Wild, Oh yeah. Yeah, Skyrim, Red Dead Redemption. Red Dead is great, yeah. It's like there's an entire ecology simulator in there. I have a high school classmate that got into studying river ecology, and he was commenting on like this is one of the very few games that's hydrologically sound. Yeah.

The way, they actually went to the effort of shaping the rivers to follow erosion dynamics and so on. It's the attention to detail and there's something there that's big. It's been funny journeying through the industry. I last designed a game in 1992. I'm not a game designer. I have a very open-minded view that the best game genre that will ever exist has not yet been invented.

As we get more technological capabilities and creatives, people use that to hopefully empowered by higher productivity tools and so on that we'll see more and more cool things emerge that we'd never dreamed possible. The idea of a world simulator is actually really interesting there. It's been tried a lot. It's usually extremely slow and expensive to create, but over time maybe we'll get better at that

and that will be a thing too. You said some interesting things there. New city builders. Yeah, civilization, it's just mind boggling that they're building a game with that depth that can evolve so dependent on your actions To do that that scale of world but to where you can step into it and be in it You know, I think Red Dead is a great example

But to do Red Dead Redemption and I'm in a way where you can walk around with friends at a large scale. And I guess what you have given so many years to is creating the tools that enable the artist to give that attention to detail that Red Dead does on several of the things. And once you do, there's something magical about that. Like once you give that attention to detail,

like I don't know what it is, but the love of the artist comes through somehow, and you could feel the care that they put into it. That's right, the best games have a soul. You can really sense it. Call of Duty has a very different soul than Fortnite, and it just kind of exudes not only in what you see in the game, but also in how players interact with it and interact with each other online.

That's a really fascinating thing. I wish we'd be studied more. I think we talked about the soul on several fronts, right? I wish we'd be studied more. Yeah. These old game design decisions that the designers make have a profound impact on what players think of the game and see in the game. Fortnite, Battle Royale, always had a sense of mystery to it. You're on this island, but you're not sure exactly what's happening here.

There are all these houses. They're abandoned. Why? And I'm not the secret holder. I'm not on the design team. I experienced Fortnite as a player, but it really had zudes, a lot of that. I'm not the secret holder. I'm not on the design team. I experienced Fortnite as a player, but it really is a lot of that and a good spiritedness as well.

Because even when you're eliminated in Fortnite, there's not like blood spurts and there's not good jobs, you're just teleported out of the simulation. Often, you end up losing the game in a way that's hilarious enough that actually you're laughing at it or you're like, respect to that player who just won because that was clever. It creates a very different dynamic than these other games where players tend to be very positive towards each other. One of the things I like to do in Fortnite just to kind of gauge how the game is going

is I play Phil Squad, a match made with three other random players and play a game together. Sometimes they have voice chat, sometimes they don't. And back when our matchmaking regions were bigger, I learned a little bit of like battlefield Spanish so I could speak with the people who are down as far south as Mexico City. And the positivity of the interactions there among every kind of person you might ever meet online

were really quite impressive and completely unlike what you would see in a game of the interactions there among every kind of person you might ever meet online were really quite impressive and completely unlike what you would see in a game like Call of Duty where it's always, you know, everybody's got to be an edge lord. I love online gaming culture. I have to ask you because it's kind of like one of the legendary games is Grand Theft Auto. Speaking of the worlds that are just like... I mean, that's a whole... That's its own thing, right? That's that world, the characters, the style, the edginess, all of that.

But the interesting thing about Grand Theft Auto VI, to me, that I want to ask you about, is they took forever. It's the six month thing that you mentioned before. There's some games like that just take years to bring to the conclusion. What can you say about that process that you eventually were able to take Unreal to completion? If you were to look from the outside, why does it take Grand Theft Auto that long or other companies to take the games to the conclusion? Just insight into what that process is like. Making games is very hard and

especially when you're pushing the boundaries of something. With Grand Theft Auto, it's just the realism and feeling that you're in this huge city and that anything can happen and it's all living and breathing, and you're just a part of it. The level with which Rockstar has brought quality to that genre is astonishing. When you're building something at a level of quality and detail that's never been achieved before,

you can't predict how long it will take. Whatever problems you're solving today to get to the next iteration of quality on it, you don't know what new problems that will unlock. And often, you fix one thing and make it super realistic, and that just highlights the unrealism of other things that you need to fix. I think the thing that always comes to mind is that

shipping a game is easy if you don't have a high quality standard. We also won't have much success. What we've seen from Rockstar is they take a long time but they ship amazing games, and it's worth it in the end. A bad game is bad forever. A late good game eventually is released and is good.

Do you ever feel, like Rox has a good example of that, the pressure of delivering quality? Epic has not missed recently, that I'm aware of, in terms of delivering quality. Do you feel the pressure of that? That you're not allowed misses? We certainly do. Everybody's often working very much to the last minute

to make something excellent. And it's really hard with these fast delivery timeframes because you really have to get a lot of stuff up and running before you can judge it, like a new Fortnite season holistically. It's not until like the last month or so that you really know what you've built and you really understand it. If any late-breaking problems emerge in balance or anything else, it's usually towards the

end and that usually leads to a rapid push to fix it. Then other lessons you can only learn live and from experience. And that means accepting a game that like, it's a live experience and it's also an experiment and it's gonna continually be improving. Anytime there's some things that some people don't like and you learn from it and you improve it and you move on. Let me ask you a big philosophical question.

So you've created these gigantic worlds that bring so much fun to humanity. Now, but you also get to learn about humanity. What gives you hope about us humans, about the future of humans, about the future of humanity? You know, I see two contrasting worlds that have been brought about in the digital age. One is the world of social networks and people typing at each other and just massive negativity

and politics and hucksterism and curation by engagement often promoting negativity and toxicity. That's a harsh world that I think is a step backwards in many ways. I think the foundation of the world is actually a little bit shaky because of just the social dynamic that those platforms have brought on. But I compare that with the good spiritedness of what's happening online when you're connected to real people. Like actually playing Fortnite, playing Fortnite fill squads with people you've never met before,

never talked to and just judging what human connections develop there and whether they're positive. I found those to be really, really excellent and endearing. I think the lesson from all of that is that humans talking to humans and being together in a simulate, a world, real, the real world or virtual world is a naturally empathetic medium at which naturally leads to bonding.

Conflict sometimes occurs. It's just generally so much more promoting of our social norms and good interactions between people and positivity promoting. Whereas the typing angry message thing at each other as a self-reinforcing negative dynamic that's negative. And I think you look at social media and you look at gaming that is increasingly social. I couldn't see a bigger divide between any two mediums as I see there in terms of the actual social dynamics, one super positive, one super toxic at times.

Yeah, that's actually really the text-based medium. Now that could even be around gaming. You could look at discourse, it could be a real toxic in text. But you place humans together in the real world, here in the room. I literally have never, like, I very rarely see humans not get along in the physical space. And the degree to which you can create a digital space,

like a metaverse type of space, where it's sufficiently immersive, where you feel the other person, the empathy comes out. And then the joy that's derived from the empathy comes out. And it's just a reminder that humans like I Don't know the humans are good and they want to see the good in others They want to share the goodness and then you know, like when they get in that group together There's love there now they might

Talk shit about some other group. this is the dark side of humans, but together in terms of the dynamics of that group is joyful, so yeah, that gives me hope as well. And the more degree which we can create those worlds online that make it super easy for us to connect in that empathic way, the better. And I am grateful that you are pushing the boundaries of what's possible in creating such worlds and I'm grateful that you would talk with me today too.

This is amazing and it's an honor to talk to you. Thank you very much. It's been fun. Thanks for listening to this conversation with Tim Sweeney. To support this podcast, please check out our sponsor in the description. Now, let me leave you some words from Benjamin Franklin. We do not stop playing because we grow old. We grow old because we stop playing.

Thank you for listening. I hope to see you next time. you