The a16z Show - a16z Podcast: Gaming Goes Mainstream

Episode Date: February 17, 2019

Bobby Kotick is the CEO of Activision Blizzard (a merger he engineered); it's one of only two video gaming companies in the Fortune 500, and the largest game network in the world. The company is responsible for some of the most iconic entertainment franchises, including Call of Duty, Candy Crush, Overwatch, and World of Warcraft -- as well as its own professional esports league. So in this episode of the a16z Podcast, Marc Andreessen interviews Kotick on everything from the evolution of video games in the 1980s to gaming trends more broadly. What changes as gaming goes from "just for nerds" to "just for kids" and spreads more broadly into entertainment and cultural phenomena (esports, Fortnite, Pokemon Go, etc.)... both online and offline? The conversation originally took place at our annual innovation a16z Summit in November 2018 -- which features a16z speakers and invited experts from various organizations discussing innovation at companies small and large. You can also see other podcasts and videos from this event here: https://a16z.com/tag/summit-2018/ Stay Updated:Find a16z on YouTube: YouTubeFind a16z on XFind a16z on LinkedInListen to the a16z Show on SpotifyListen to the a16z Show on Apple PodcastsFollow our host: https://twitter.com/eriktorenberg Please note that the content here is for informational purposes only; should NOT be taken as legal, business, tax, or investment advice or be used to evaluate any investment or security; and is not directed at any investors or potential investors in any a16z fund. a16z and its affiliates may maintain investments in the companies discussed. For more details please see a16z.com/disclosures. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Hi everyone, welcome to the A6 and C podcast. Today's episode features Mark Andreessen interviewing Bobby Codick, CEO of Fortune 500 company Activision Blizzard, the largest game network in the world, responsible for popular entertainment franchises such as Call of Duty, Candy Crush, and World of Warcraft. The discussion originally took place at our most recent annual innovation summit and covers everything from the evolution of games in the 80s to the mergers and acquisitions that created the company he runs today to trends in gaming, including touching on e-sports. You can also find other podcasts and videos from this event at A6&Z.com slash summit. Please note that the content here is for informational purposes only, should not be taken as legal business tax or investment advice,

or be used to evaluate any investment or security. For more details, please also see A6&Z.com slash disclosures. So Bobby, it is really fun as a longtime video game aficionado. Really fun to have the chance to talk to you today. I would love to start with your origin story, as they say in the superhero business. So heart of your origin story, if I recall correctly, is that you started writing software for the Apple 2 while you were still in college. So my college roommate and I started a company, he worked at Apple Computer in France. He was French. And his summer internship, he was working for a guy called Jean-League Ase. And they had a prototype of the Lisa.

The Lisa was the Mac before the Mac. It was the $10,000 version of the Mac. So he saw this prototype of the Lisa and thought for $10,000 this would be too expensive to turn into a consumer product. So he came back from his internship and said, we should make Lisa-like software and a mouse for the Apple 2.

And we were in another sort of technology-related business in our dorm room at the time, but we were making hardware. I thought this would be a better business, this makes software. And we really thought if Steve Jobs is going to appropriate all the great technology from Xerox Palo Alto Research Center, we should do the same, but do it on a broader scale. So we designed this mouse and a word processor and a spreadsheet and a database, all for the Apple 2 with a graphical user interface about a year before the McIntosh was released.

You also, I believe, credit, if I'm correct, Steve Jobs with convincing you to drop out of college? I don't know if it's credit. But Steve Jobs heard about us. When you started, you're in college. I was in college. He was making Apple II software. And he heard about the software. And he called me and said, you know, the lady said,

Steve Jobs calling it. I was like, okay, it's one of the kids I grew up with from Rosal and Long Island. And this is not even that good a joke. Steve is like super famous, like cover of time magazine. Yeah, this is like 1983, late 1983. 83? 83, right? Super famous.

Yeah. Yeah. And I'm like, yeah, right, whatever. So I pick up the phone. He's like, hi. I said, hi. He said, this Steve Jobs. I said, yeah.

And all I'm thinking is, like, I wanted to say, like, I'm Oscar Robertson. I was a big Knicks fan. I thought, like, so he starts, like telling me, you need to come to Cupertino, and I really want to talk to you about this Jane thing that you made. And so I go, and he shows us prototype of the Macintosh. And, like, I'll never forget this moment. He unzips this little blue bag from off of his table, and he takes it out.

and he turns it on, you see the hello come up on the screen, and I thought, wow, this is unbelievable. This is going to change computing. I still get the goosebumps of just thinking about it. And then he said, okay, now show me yours. And so, like, I had lugged this Apple 2 with, like, the 64K floppy drive, and this mouse that we designed,

and we put it on, and I show him the mouse, and he looks at it, he's like, this is a piece of shit, and he throws it on the floor. And he says, you're going to use our mouse, And don't ever think of using a two-button mouse. You can use a one-button mouse. And then I show it to him. And the first thing he says is, wait a second,

you select the text and then you select bold face. I'm like, yeah. He's like, no. We're going to think about verb-nown versus noun-verb and the way you actually bold-faced type. And for 45 minutes, we have this huge debate about how you bold-face type. And at the end of it, he's like,

you're going to make this for a new computer that we're going to build, called the Apple 2GS. And we're going to tell you all about it, but you're going to make the software for the Apple 2. and we're going to give you a contract. She gives us a contract. And then he comes to visit us in Ann Arbor, Michigan,

in our office above a Burger King. And the first thing he says is like, how the hell do you work here? Like the smell of burgers comes up the elevator. It was cheap rent. Nobody else wanted a rent on top of a Burger King. So at the end of the meeting, he says, do you have any vegetarian restaurants here that we could go to for dinner?

And I said, yeah, I'm sure we do, but I can't go to dinner. I have a class. He said, what do you mean? I said, I have a class. He said, in what? I said, it's a history of art makeup class. He said, what are you making up for? I said, well, I didn't go to the class.

He's like, why do you need to go to this? I said, well, I'm in college. And he looks at me, he's like, what are you talking about? You have a contract with Apple Computer, and we have a deadline for the Apple DGIS. You can't be in college. You have employees. You have to work full time.

He's like, get out of college. And I said, I can. I promise my parents I would finish college. He said, no, you're not finishing college. I will rip, and I can't say that word, I will rip this effing contract up right now if you don't quit college. So I quit the next day.

Did your parents believe the story? I didn't tell them for about 80. Eight months. I felt like, all right, I needed to get more progress in the business before my father would say you're an idiot. Now you took money from this gambling guy and you quit college. You're just a loser. Crazy guy forcing you go to college.

So then fast forward a few years. So 1990, you bought 25% stake in Activision, became CEO in 1991. So Activision, people may not know. Activision was a storied brand in video games. Activision, I believe, this is correct, was the first third-party developer of video games. In 1980. In 1980. So it was a spinoff from Atari.

It was four of the top people at Atari. They got in conflict with management. And this is a very big deal, number one, just because, you know, to quit and start new company's a big deal. But also it's just a big deal because, like, literally there had not been a business of making video games for somebody else's platform. Atari made all the games for Atari. And now this company Activision, they had a run of hits, I guess, in the 80s, early

80s. You know, they made a bunch of the top games for Atari systems. And then they went bankrupt or they were about to go bankrupt? They had a decade of pathetic performance and then finally went bankrupt. Okay, got it. So it's long ago. It was a whimper, not a bang. And so how did you get from building mice and your above the Burger King to buying Activision?

So in 1987, there were no real video game hardware companies, and I played a lot of video games as a kid, and I loved Activision games. So they made the original Atari 2,600 games that made the company so successful, were games like Pitfall and Riverade and Kaboom, and these were just great games. And so in 1987, I thought there was a great opportunity to make video. game hardware. And nobody is making video game hardware. Games are just played on personal computers.

Nintendo was just coming to the U.S. so there was no dedicated video game hardware. My best friend from growing up had just started a hedge fund with this guy from Texas named Richard Rainwater, and they were looking for investments. And I went to him and I said,

I have this idea. And in 1987 in October, the market had crashed. It was like a 500 point market crash. Black Monday, I called it. That's a big deal. The biggest crashes in the market history since the Great Depression.

And I had been working, making software for among other companies, Apple and Commodore. And Commodore was this $900 million revenues company at the time with $150 million market value. And so I went to my best friend, and I said, we should buy Commodore. They have this computer called the Amiga,

and it has a keyboard and a disc drive. But we should pull the keyboard in the disc drive, out of it, and it would be the first 16-bit video game system. And it was designed by ex-Itatari engineers and was made basically as a video game device. It was a big thing forward to graphics performance at the time. 68,000 microprocessor and dedicated graphics processors, and it was like a really innovative idea.

And my best friend at the time said, yeah, let's try and do this. And so we tried, and ultimately couldn't persuade the chairman of Commodore to do the deal. but I just became then fixated with being in the video game business and my best friend at the time was Eddie Lampert who then went on instead of buying Commodore to buy Sears and Kmart and he was a customer for a little while we stopped extending credit to him I think four years ago though

so I thought okay we have to be in the video game business and I had a little side business that was a licensing company We licensed characters. So one of our licensing partners was Nintendo. And we were licensing Nintendo characters for bed sheets and lunchboxes. And I knew the Nintendo people. And one day I was having a Nintendo meeting.

And they said, have you ever thought about Activision? And I said, yeah, I know the company well. I played all the games. And they said, they're not in really good shape. And they're about to lose a patent infringement judgment that will probably make them bankrupt. So you should consider buying Activision. So I bought a 25% stake in Activision for $440,000,

and I became the largest shareholder. And it was insolvent, but I tried to get the CEO on the phone to tell him I was his new largest shareholder. So a public company, the market cap of $1.6 million. Yeah, $1.6 billion. And a patent infringement judgment that made it insolvent. And so I couldn't, here's this company that's doing horribly, has all these great franchises,

and the CEO wouldn't return my phone call. And so I kept calling, I kept calling. And finally I just thought, I'll just go to the lobby of the building and tell him I'm there and see if he'll see me. So I go and I'm waiting in the lobby. And finally after three hours, he says, okay, I'll come talk to you. And I talked to him and I said, you know, where you're your largest shareholder, I have some really great ideas for you,

I have some game ideas I'd like to make, and I love some of the old properties. Maybe we can figure out how to really get some of those properties back to being games. And he's like, well, thank you very much for visiting, and nice to meet you. And I said, no, no, when's the next meeting? And he said, there's not a next meeting, but we're very happy to have you as shareholders. And so I thought, well, how does that work? I own 25% of the company.

I'm the largest shareholder. Literally a quarter of the furniture in the lobby. and he didn't return my phone calls for a little while. And then he agreed to have breakfast to me at this Consumer Electronics show in Las Vegas. Obviously, Activision was then, you know, tremendously successful. You then did one other really, really big deal

that was transformative for the company, which was, and I don't quite know how to describe it, but I think it's a merger with Vivendi games that resulted in Activision Blizzard because Vivendi owned Blizzard. Blizzard, obviously, World Warcraft, and all these other amazing properties. And then ultimately that partnership on one.

Maybe you could tell us, like, that was a very, very big deal you at the time. How did that deal come about? So it was the spring of 2008, and I had a lot of anxiety about the public markets. This is the financial crisis is brewing. Yeah, and you could see there was a lot of volatility instability. We were nervous, but we thought, you know, if we could buy something, we had a big market value at the time.

And I thought, if we could buy something great that we really love, this would be a good time to do it. And you guys weren't yet doing the massive multiplayer. You guys weren't yet doing it. Like there was this big, World Warcraft had been a big hit at that point. Huge hit, and we had explored doing a massively multiplayer persistent game. There were a couple of other games before World of Warcraft that were massively multiplayer games, but nothing that had this success of wow. And we looked at and said, if we even could figure out how to do it,

it would take us five, six, seven years, and a billion dollars, and the likelihood is we wouldn't do a good job of it. But it was a, and I knew the Blizzard team, because we were, we had worked with them on, they were a contract development company in the early 1990s, and I knew the team very well and really liked them. And I had tried to recruit them out of the company. And I knew that they had so much of a love and a passion for the company that no matter who owned it, they probably wouldn't leave.

And I called the guys at Blizzard a bunch of times and said, we should truly try and work this out. And they were stuck as a division of Vivendi Games, which was owned by Vivendi. And you might describe what Vivendi was at this point. It was a big mess. It was a former, if I think it's correct, it was a former public utility? Well, it was the water company of France that this very...

And by water and other things that flow through pipes. Yeah, water, other things that flow through pipes. It was a collection of more industrial businesses that a man had taken it over and decided he was going to become the media mogul of Earth and bought Universal Studios and anything he could actually buy. he just bought. And then it got

disassembled because it was insolvent and they ended up with a couple of businesses. The best one for them at the time was probably universal music, which I think Lucien is here somewhere. So they had universal music. They owned

Marac Telecom, a stake. They owned SFR, which is a French mobile company. They owned Cana Pluce. And somehow they managed as a part of a bunch of things to own this games business, which included Blizzard. And I asked them to sell us Blizzard.

And we didn't have any interest in the rest of their games business, but we wanted Blizzard. And they said no repeatedly. And we offered them $4 billion, and then $5 billion, and then $6 billion, and then $7 billion. They kept saying no, they like video games. So we came up with this idea,

and we said, how about this? We'll stay a public company. You sell us Blizzard, or give us Blizzard and $2 billion of cash, and we'll give you 51% of the company. And my view was in 2008, even the biggest institutional investors no longer were really long-term holders. And all the big institutional investors were trading in and out of the stocks like they were hedge funds.

So if we could get Vendee to own 51% of our company, we got Blizzard as a partner, we would have a great business and a stable shareholder who would never sell our stock and would be enthusiastic about investing, at least what they told us, investing with us for the future. So we went back and forth for a long time,

finally negotiated a deal where they would do that deal. And I almost blew the deal in the worst way, too. They had this beautiful headquarters in France, like the nicest building in France, and the guy who would put the original Vivendi together, there were lots of these beautiful French offices that had gardens on the top of their roof. He built a park.

And like mature trees, on the top of the Vivendi building, it was like a park. with trees that were all over the place. And one room was like a wine cellar, and one room was this magnificent dining room. And so we're standing on the top of this roof, overlooking the Arch de Triumph and the Eiffel Tower. And the chairman of Evendi says to me,

you know, Bobby, this building, it would be your home, this will be your place you can do your business in France, and you should treat this building like your own. You can do anything you want to this building. But it will be your place for Paris. can make a business here. And, you know, it's the most beautiful building in Paris. It's the most beautiful view in Paris.

And it's for you. You can do anything you want with it. And I said, anything is just anything. And I said, could I build 20 stories of condominiums? And he turned white. And I could see the like, oh, my God, who were we getting in business with love? I was going to say, he hadn't been briefed. And I said, no, no, genre.

I'm just kidding. We would only build 10 stories. But he still went through it. deal. And so we had five wonderful years with them as our 51% shareholder until they were forced to sell our stake. But it was the thing that actually allowed us to acquire a business. It's a big deal. I mean, it's really uncharacteristic for a company like this with a founder, really, of the modern business, and then a CEO like you to be willing to sign over control, right? So that story to me makes a lot of sense if you'd said 49%. What was it about that deal that made you

willing to do the 50, to literally sign up? Because that was a pretty, the, It worked out well, but that was a pretty big risk at the time, or not? I didn't really think I was selling control. I think I was selling 51%, but I thought they really know nothing about video games. What are they going to do? And I don't think they're going to interfere all that much. I was actually wrong. They didn't really have, you know, it's like a corporate holding company,

so they were always trying to justify their value as a corporate holding company. And, you know, we had like, I remember the, and Lucian, who's here, we'll attest to this is exactly what happened. But they said, we're having a synergy meeting and all the business unit heads need to come together for the synergy meeting. Now, they own a stake in Morocco, we didn't do business in Morocco.

They owned SFR, the French telephone company, and mobile games wasn't really a thing at that time. They owned Kenel Plus, so a French TV network didn't really have any applicability. And Universal Music, where we did license some music for guitar hero, but other than that, we had no relationship, and a broadband company in Brazil. So we all get together and have this big synergy meeting, and then we had to go around the room and say the synergies that we identified between each other.

And they got to me, and I said, that Maroc Telecom, we went to their cafeteria, and they have Tajin. And we got the Tajin recipe for our cafeteria, which I thought was a great synergy. I like Tajim. But there wasn't really that much synergy. Quite the reaction. Yeah, yeah, yeah, exactly. So then they had to sell us back their stake.

Yeah, and then it would be completely unwind it, ultimately. And I guess, and they completely unwound in their own way. And everybody did well. Everybody did well, so it turned out. So give us a kind of a state of the video games industry today. Gigantic global phenomenon, lots and lots of change in flux, lots of potential controversy. So I would say of the 28 years I've been doing Activision,

and 30-some-odd years I've been doing software, I've never seen more opportunities than exist today. Markets that are opening, and you think just 10 years ago, if you wanted to play video games, you either needed a $1,000 PC or a $400-dollar video game console, and there really weren't any other ways to play video games. But phones have ushered in this whole new opportunity. For years, for most of the tenure that I've had as CEO,

So we sold in developed countries to middle-class consumers on expensive devices. Today, we sell in 196 countries around the world. We have 400 million customers, and anyone in any socioeconomic strata can actually play games. I think that was the biggest shift that took place, is now you truly have a global market. The second thing that then happened is when you started to see the games become, more social experiences. I can use a headset, I can talk to the person I'm playing with,

I can play with somebody from anywhere around the world. The introduction of the social experience was the true transformation to me of the opportunity. And so where you look out in the world today, you have a global audience, you have this ability to create this true social experience. And I remember years ago hearing this, and I'll paraphrase it, but Mandela had this definition of sport,

that it was the great equalizer and it was this thing that allowed you to actually break racial barriers or religious barriers and economic barriers in order to foster competition and that the great competitors in sport could come from anywhere and everybody felt this ability to have

a sense of belonging and purpose and meaning and that is what video games has become for so many people and it's hard to illustrate this for some people but I was at a panel not long ago with Alex Rodriguez, who actually owns one of our Overwatch team franchises. And Roger Goodell, who is the NFL commissioner, and the moderator said, are e-sports sports? And I said, the same characteristics that Mandela described

what makes sport great is what makes e-sports so compelling and engaging. And I said, to Alex, stand up. And Alex stood up, and I said, look at you. how many people in the world can play professional baseball? And he said, well, there are roughly 1,200 professional baseball players in the Major League Baseball and about 3,000 capable of playing Major League Baseball. And I said, look at this guy. This is like the most fit athletic specimen of a human on the earth.

And there are only 3,000 of those people who can do what he does. Video games is the only competitive medium that is going to give me that experience and that purpose and that sense of belonging and that camaraderie that you get from sport. And so, of course, it's going to be as popular as sport, if not more popular in sport. And that, I think, more than anything, is now what we see is driving consumption and engagement and interest and passion. And we're just scratching the surface of opportunity. So I think, you know, people have obviously had a lot of great experiences and a great faith in the video game industry for many years based on the idea that everybody can participate.

this idea that people are going to voluntarily watch other people playing video games is a new idea. And obviously it's becoming a Twitch and caffeine in one of our companies and so forth. Like this is going to be a, it already is a very big phenomenon. It's a key part of e-sports is, you know, the ability to fill an arena with people watching other people play video games. Like that a few years ago, that just sounded wildly implausible. What was the point? Like, when did you figure that out? Well, I think probably when we launched, I didn't own Blizzard at the time.

But when Starcraft launched, this was a game that in Korea, I think, think at the height of its popularity. Rob's here, so he'll know the exact number. But I think, this is more than a decade ago, but the height of its popularity in Korea, Starcraft, had 5 million registered players. Now, this is a country of 60 million

people. The game is primarily a male game experience. And so, you think about 20% of the population, actually, of the male population, played or was a registered player of StarCraft. And we saw arenas getting filled with spectators. There were

three dedicated cable channels in South Korea that just broadcast Starcraft competition. There were sponsors. There were professional players making $100,000 or more. So there's an amazing phenomenon that took place that we looked at as purely marketing. You know, people are enthusiastic. We saw the box.

There was nothing more to it than that. And we managed to do every single thing wrong in commercializing the e-sport of StarCraft. But it was the first time where I really thought, there's something that could even be bigger than the games themselves that would relate to the spectator experience. Now, even with games like Overwatch, which is probably our most successful e-sport initiative,

it's more like golf. So if you're a spectator of Overwatch, it's likely you're a player of Overwatch. Fortnite, I think, was the first game where people would spectate, and it would actually be a catalyst for them to play. And so I think what's happened is it's more of a social experience in a lot of respects than it is just a game. But I think that what you're now starting to see is that games have so infiltrated the popular culture of the world

that it's exciting for people to watch their heroes who compete against each other in the same way as sport. Right. So many of the most successful games that people watch or that are now actually formally sports, correct me if I'm wrong, they were not originally designed for this, they were designed to be games that people just played. and they've been kind of repurposed into this kind of broader public phenomenon. Maybe that's completely untrue, but I guess my question is kind of, how will video games be designed going forward for e-sports and for people watching it in addition to playing

that is different than how video games have been designed up to this point? Yeah, that's a great question. So a lot of the games today were not specifically designed for spectating, which is why you end up with that phenomenon of the players are the spectators. In order to have a more broad appeal spectator experience, the games need to be designed in a way that you actually want to watch them, whether you do or don't play them. And I would say that the Overwatch team spent a lot of time early on

trying to construct a game from the ground up that would be a fun spectator experience. But I think what you will see is that people are now paying more attention to, in game design, the idea that the games may be spectated by, people who aren't players. I don't think anytime soon that's going to be the primary consideration. We'll still be principally focused on gameplay. But things like camera angles and commentating and making sure, like when we

organized the Overwatch League, one of the organizing principles was the reason why sports are so successful is tribalism. And that having a local affiliation was so crucial to the success of sport, whether it's a country affiliation or city affiliation, So we created a structure that allowed for 28 independent cities to field teams. And I think that as you start to take those considerations into play when you're thinking about the design of the games or the leagues or the competitive experience, that they will have more of the characteristics of traditional sport.

Right. Would you venture a guess as to when video games will be in the Olympics? Which is a logical implication of what we're discussing, right? I don't think so. I actually don't think – like the Olympics has never been about – a commercial enterprise. And so if you think of the analog, right, there's not, like, if you had to pick a game,

you're now endorsing someone's commercial enterprise. You know, there's not any, they don't have that analog today. And so I don't know that you could see the logical jump to the Olympics. Okay. The video game industry seems to have a particularly acute version of a dynamic that you see with,

you know, let's just say consumer properties that inspire an avid fandom. So, say, enthusiastic early adopters, right? And so you see this with movies, you see this with TV shows, you see this with basically, you know, things that really occupy the popular imagination. You know, for sure see it with video games. So you've got this kind of leading edge, I might say early adopters slash super enthusiastic user base. And they start to develop opinions. And they start to develop opinions that maybe the people who make the games aren't quite doing what they want. And then when things, you know, really go sideways, there can be, you know, protests and boycots and all kinds of, like, you can end up with the inmates running the asylum or at least looking. like they're certainly trying to. How do you thread the needle, as somebody who makes an overseas letter is, how do you thread the needle for the early adopter base

as opposed to the mainstream? And how much is the early adapter base an asset, how much is your early adapter base a challenge, a problem? So I think that the difference between film or television, you know, a great film you're going to spend two hours of your life watching. You know, great TV shows can be 13 episodes or 22 episodes of season. You know, that's going to be 13 or 22 hours. A video game, our average duration of gameplay,

that includes games like Candy Crush, is an hour per person per day. Games like Call of Duty or World of Warcraft are hours a day. So the interest and the engagement and the commitment that you're making to that form of media is so different than film and television. In my view, you have the right to have a strong opinion and voice your opinion in exchange for making that hour plus commitment a day,

which becomes more of a lifestyle. And so instead, you know, I think some companies run and hide and don't really engage their user base, but I think we have users and players who will, and audience members, who will tell you and give you really good insight into how you can modify and adapt your game.

So you listen to them. Right. And they're not always right, but oftentimes they're pretty, And especially when you hear the sort of the mass view, they're pretty right. The beauty of our business, though, is that if you can get out in front of it early, let people actually have an experience with the game, get the feedback, and you're willing to take that feedback and enhance and prove and modify the games,

it's a great roadmap for innovation. So I'd like to ask you about two games that I think are arguably, you know, transformative from a conceptual standpoint for gaming, and you tell me what you think, or maybe describe what you think are the structural significance of each of these. And so the first is Fortnite. And you alluded to one of the dramatic changes. Maybe describe what is the significance of Fortnite to the industry?

So for starters, there's this perception that Fortnite is an overnight success. It's not. Epic, the company that made it, has been in the video game. Tim has been in the game's business almost as long as I have been. And they are excellent in making games. And what they did was to really spend the time in a very focused, determined way, taking the Unreal Engine and turning it into something that was going to be a broad appeal, very compelling social experience. And I think the aspiration was

build a social network that's anchored in a game conceit. And they made it cross-platform in its playability. They made it very accessible. They changed the way that they deliver content to seasons. So move from the feature film model to the serialized television model. And it's really fun. And they managed to do what you probably can't do intentionally. but capture the popular cultural zeitgeist. And the other thing is that it doesn't require you to make a two-hour-a-day investment. You know, you can have a 20-minute experience that is really satisfying. But this is not accidental.

You know, these guys have been doing this for a very long time. And I think what it has started to do is broaden the appeal of games to people who might never have played games before. And then what is the significance of Pokemon Go? And by the way, for people who don't, I actually just saw this yesterday, Pokemon Go, third-party report, but the report was, revenue last month was still in the order of $75 million. So it's still something like a billion dollar a year

revenue business today. And this is where the game is now, what, two years old or something like that? Almost three years. At least rumor has it, you know, they have new stuff coming. But it's been a giant hit. Again, it's like, where's the innovation there? But it's like, you know, and Nintendo is really great at innovations that are very physical in their nature.

So the Wii, like that moment I was describing to you about the Macintosh, When I first saw the prototype of the Wii, it was like that equivalent goose bump moment. I was in Kyoto and I went into his room and there was a TV. And it wasn't like in LED. It was an actual tube TV. And there was a pond that was on the screen, a little cartoon pond with little bubbles popping up from every once in a while. And the head of Nintendo at the time was a guy named me Wadasan.

And he gave me the controller. And I held the controller and I just started going like, and all of a sudden you could feel the tension of the controller and the motion control of the controller. And I started to like fish around and I grabbed the fish and I pulled the fish out. And I thought that video games would be completely transformed. Nothing had really taken the physical experience in video games to that level. And I think that what Pokemon Go did is something very similar, but it created this physical experience that was, I think,

think it was the first time AR had been executed on a broad scale. And so I haven't seen anything in gaming that I would tell you has really captured the imagination of people on a broad scale using AR besides Pokemon Go. But I would say when you look at some of the next big innovations in gaming, including what we're working on, AR is going to have more near-term impact than VR. Amazing. Okay, good.

And then final closing question, what's the one Activision game that has come out this year that people really have to play. And then I know it may pain you, but I'm going to ask you, what's the best non-activision game that has come out this year that people really have to play? So I would say call of duty Black House 4, which we just released, the blackout mode of Call Duty Black House 4

is so incredibly fun to play. And what is that? What is that mode? It's like a PubG mode. It's like a Battle Royale. And it's super fun to play. And you can do it in like small 25 minute increments, but very accessible, very fun to play.

I haven't played Red Dead Red Dead Redemption yet, but I want to. And I would say of the things that have come out this year, I think it looked. Westerns are very hard to do because they're very American in their field, but the game looks fantastic, and everybody they know has had a lot of fun playing it. Yeah, fantastic. And I think we have party favors.

We've got Call of Duty for everybody. Call of Duty. So I believe everybody's going to have a copy of Call of Duty. Bobby, thank you so much. Mark, thank you very much.