The Standup with ThePrimeagen - Microsoft DOOMs ID with layoffs

Episode Date: July 10, 2026

In this episode of The Standup, we dig into the Microsoft and Xbox layoffs, what they could mean for id Software, and whether id Tech can survive after major cuts to its engine team.

Welcome to the stand of today. We have a very special episode. You may notice that it looks lower quality video. That is because we have nobody here to record, and I'm just Rod Dog recording the screen straight from Riverside. Yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, sorry. With that, we are going to be talking about Microsoft layoffs. Now, Microsoft has just recently released an entire kind of expose of exactly what happened.

This is by Asha right here, the new CEO of Xbox. is let everybody know that they are laying off a whole bunch of people, a bunch of reasons in here, things that they want to accomplish, including a bunch of crazy pieces of information. I did not think we were going to learn, along with also crazy management style of Xbox itself, and a bunch of studios and people have been hit today directly

because 1,600 were laid off and 1,600 more throughout the fiscal year of 2027. Also, really weird way to measure time is the fiscal year. I'm just throwing that out there. I think that's just weird personally. But at the end of the day, That is what has happened, and we're here to discuss it. And I figured one of the big burning topics that I see all over the internet is about Id Studios. Id right now is kind of like the star of the layoff, if you will, approximately 10% of the total layoffs, 132 out of 1600 of the layoffs.

I believe it's 132 or 135 came from Id Studios. Most of the engine team has been gutted a bunch of designers, a bunch of people running it. effectively the the heart and soul of it has been ripped out and now what is left is just whoever is remaining there right now and it would probably be impossible if or improbable if not impossible to be able to make anything and so I first wanted to talk a little bit about that because I am not in the video games industry I don't know what it takes to create an engine I don't know what it takes to maintain an engine I don't know what it takes to move forward an engine and we do have with us a legendary game program

or Casey Muratori. Who does engine work in fact? And so I would just like to hear some of your thoughts maybe from the engine perspective of like, is it just doomed to become yet another Unreal 5? Was that a pun? Was that a pun? It actually wasn't a pun.

I'd even realize it was a pun until you said it, but is it doomed to become another Unreal Engine game? Before we attempt to answer that question, I wanted to talk about something you mentioned in that lead-up, as well. Oh, yeah. Which is you were pointing out, like, fiscal year 2027.

I don't know about you guys, but in my mind, I imagine, like, Sotian Della and Asha Sharma, and I don't, I mean, I guess I don't know who runs the other divisions there. Do they, like, get together for a fiscal New Year's party? Like, whenever this year, like, do they all, do they, like, stay up till midnight? And then they pop the champagne and they're like, happy New Year! Happy fiscal New Year! Do they all press the button together, like, when it rolls over? They're like, yeah. New filings, SEC, and they press and everybody freaks out.

And then they sing a song that's like Old Lanzine, but it's about, you know, accountability margins or something for, you know, or whatever. Tej, production's down. I don't concern myself with such matters. What do you mean production doesn't concern you? I've shipped 37, nay. 38 features today. Teach always makes the mess and I always clean it up.

I'm better than that. I don't have to be a janitor. Someone has to be the adult around here. Oh, who is that? It's me, your Westlake Godfather. John Carmack? What? No, it's me trash. Oh.

Wait! Are you here to finally get management to understand software? What? I'm a West L.A. Godfather, not a miracle worker. Oh, then why are you here? I'm here to tell you about Seer by Century, the world's first AI debugger that actually has access to all of your logs, stack traces, code, commit history, and more. Code breaks, but you can get the fixed faster with Sear. Who are you talking to?

What? Build with AI. Fix with Century. I think there's a couple problems here with trying to answer it. We can talk about some abstract stuff, but the biggest problem or the thing that I don't know is we have like no, like I don't know any inside stories or anything from the people there and what happened, right? So everything is on the table. Like everything from literally they just got handed layoff notices. So like, you know, a substantial portion of the engine team just wakes up in the morning to like a thing where like someone from HR told them that you don't have a job anymore.

All the way to like they were approached and said, look, we need people to do programming on stuff because we want to build out these other properties like Minecraft and Forza or what, well, forced that playground has their own engine team but um you know these other properties we have king like we want to put put you on these other things and you'll be a centralized engine division um and they were like we don't want to do that we would rather take voluntary layoff or something like you know i literally just have no idea so i don't feel like i can really comment on anything specific to the id software layouts with layoffs with no with no data right because there's it's not good, so it's not like there's any out,

there really isn't probably anything where I would be like, yeah, great, unless it was, they were approached with something and they all decided, screw this, we're going to go form our own company

and took a voluntary, and now we're going to have like a new, like, id thing somewhere else. I suppose that would be good. Um, but short of that, there's,

there's no real like way to spin this as a good outcome probably. But how bad this is depends a lot and how, how like frowned upon, I would say that the behavior by Microsoft was, is a sliding scale based on what really occurred, and I just don't know. Is that fair? Yeah, yeah, that's fair. I wasn't really trying to look for like the moral side of things.

It was more of like, is it possible for id to continue being id and being, you know, its own game engine producing these kind of technical masterpieces, as I often see people claim the Doom series is? is it possible with the gutting or is it i mean just in your experience as a as an engine creator how hard is it to move forward when you have a significant portion of your team gone i mean it really depends on what you're going to be doing and like what that what the moving forward requires right so the first thing i'll say is that in sort of modern in modern engine development, usually the bottleneck, if you have good engine people, the bottleneck is not

like that we had to sit down and write some code for this engine. In other words, the stuff that Fable does or whatever, right? Usually that is not going to be your super, the hard part of the problem, right? The harder part of the problem is usually on two other, on like two other, in two other domains. One is just figuring out what actually should be built at all, right? Yeah. And this is basically active research into like, what is our strategy going to be for like dynamic lighting?

What's our strategy going to be for like level of detail, like those sorts of things? Those technologies sort of, they change shape over time because the underlying capabilities of the hardware change. And so every so often they're like, you have, they're disc, discontinuous. So, you know, previously we were doing things without ray tracing, and then we get enough hardware to make ray tracing make sense, or we make enough software progress to figure out ways to do ray tracing in ways we weren't doing it before that make it economic to do so. And now we have to like re-architect the way their engine is working. And that, again, well sometimes, and certainly

for novices, it can be the case. Sometimes, you know, you look at that and be like, oh, well, so it's all about writing this code. No, like, that's not the hard part for experts. The hard part is knowing what you were supposed to do. What are the algorithms? What's all the math have to be? How does it all work out cleanly? How does it all move through the system at a fast enough speed?

All of that stuff requires a lot of experimentation, a lot of testing. And if you look at stories from people who have done, like, these sort of big technical push is there's often just a lot of that. It's like, well, we tried this and we tried this and we try this. You could go look at the presentation by the guy who made Nanite, for example, and you'll hear that. You can go look back at John Carmack stuff or Michael Abrash's stuff that he put out when they were working on Quake. There's just a lot of like, we had to try this, we tried this, we tried this, we finally found that this was the right thing, right? And so that requires currently a lot of just people.

Because for every one of those that you want to try to do experimentation on, somebody's got to be sitting there doing it. And even if you are buying into the new AI future or whatever, AI still need a ton of guidance for that kind of work. They need somebody there to tell them what to do constructively and to build test cases and to say, I need you to try doing this and then to look to see if they actually did that right or if they screw something up, you know.

And so... Let me jump in there for a second too. even if you could do all the looping and all the fancy words that they say let me give you some AI speak even if you could do all that looping and all that the actual getting the data out and all that could take some amount of time and so that loop itself could for each one of these experiments could cost you $10,000 worth of fable time plus two weeks of actually running gathering testing running gathering testing and tests so it's like it's not a it's not just like a oh just put AI it just makes it free it's like no it could actually also cost a large chunk of money plus

the engineers time And I just, like, I haven't seen a lot of evidence that there's any kinds of significant speedups happening yet in that domain where it's like, oh, yeah, like we can just now, you know, some studio got it to the point where, like, one engine coder can just kick off tons of agents and run all the experiments and it works out. Like, maybe that's a future that can exist, but like no one has that at the moment. And so this, so just to answer your question. So, so depending on how much of that you envision doing, that changes pretty dramatically the kinds of budget that you're going to need for the technical side, right? And that's like prong one. And if you're looking at a company like I'd, I guess I would say they, I am just kind of out of touch with what their engine team looks like these days. I know that when Carmack left, they brought in Diego Sousa, who is extremely good. and he kind of like ran the engine team, I think, on the graphics side anyway. That's my vague recollection of what happened.

They were very efficient. They were very good at doing that kind of experimentation. They were very good at, you know, even like six months. They would do a lot of graphical overhaul kinds of stuff. I don't know how many people he usually had with him or whether those people are still there. So that part, I just, like I said, I just don't have the inside. I would love to know more. If someone presented me a little bit more information,

I could have a much more informed comment. I simply have not seen anyone post that information. Maybe because it's not really supposed to be talked about or whatever. So I don't know what's going on with that. The other prong is pipeline. So the pipeline of how assets are produced, how they are edited, how they are put into a game context, how they are sequenced, how they are marked up,

how they are tested, all of that stuff. That is traditionally a massive part of engine development budget. And the reason for that is because for whatever historical or economic accidents, we could spend all day trying to think about why this was the case. But unlike many industries, the game industry has been unable to find vendors who will sell them tools that actually make the things that they need for games. That simply just does not happen currently. And I'm not 100% sure why. What does that mean? The assets? So, for example, I'm thinking like of a PNG when you say the word asset. Yeah, that's what I'll think.

Right. So literally nobody uses a PNG, you know, for putting something again, right? That's totally trashes. That's what he would make up. To a AAA game. They might use it as a temporary export format that goes into some other thing, right? But basically what has to happen is for an engine, you need a thing that will package everything all of the data and all of the information that you might need at all. All of that needs to be put into some kind of format that runs efficiently, that streams in, right?

So it has to be incrementally loadable and these sorts of things that has level of detail information baked in. So like, it's not just this PNG, it's all the other levels of detail. And just to give you a couple simple examples, right? So currently, if you want to make anything that is an actual final thing, you know, final game data set, I don't care what you're using. Using Godot, using Unity, using Unreal, you use in IDTech. They all have editors. They all have custom editors that you use to actually make those things. And when you talk about some

external file format like PNG, it's always just something that you import in and then gets processed it and worked with and placed and annotated, like you get more information, merged with other ones because like, oh, we loaded this PNG for the color and this PNG for

the bump map and like we put them right. And so sometimes parts of that process do have like a company does go out and make an actual tool and it's like, okay, finally there's a tool that handles maybe this subchunk. An example of that would be like substance, the tool that people use to make textures now. Another example back in the day would have been mudbox or Z brush, which allowed you to actually sculpt models and have really high res data that was stored with model geometry. So sometimes chunks, there is like a company that goes off.

and does a chunk for you of that. But at the end of the day, a huge subset of that pipeline, often or almost, I guess I would say, always, almost always. There are cases where people have done it in Maya or 3DS Max on occasion. But nowadays, you know,

if you're talking about any of your big stuff, Grand Theft Auto, you know, Fortnite, anything serious. Towers of Mordoria. Towers of Mordorra. Well, okay, that's like quite, quadruple a. That's more like Ubisoft's skull and bones, but sure. So, typically, you have this whole other team or multiple teams that are doing nothing other

than making the level editor and the asset packing pipeline and the LOD generation and the artist preview lighting tools and the lighting baking tools because now you need tools that like compute things like light probes or fallback stuff for when your hardware doesn't have ray tracing and all this stuff. So that is often as big or bigger, usually like it's larger even. In-game cinematics, that's another one. Blah, blah, blah, right? No question. Yes.

The process that you just mentioned, like, do these not happen often enough? Or are they always, their implementations are bespoke to where there's just no industry standard tool? to like do these things? Well, I mean, I think probably the right way to say it is that for whatever reason in terms of the institutional knowledge

of how it had to happen or something like that, there was really, I guess, never a circumstance where the money was right and the people was right to have it happen externally. So what kind of happened is unreal now is the de facto standard. So you could say, we did end up getting one, and it's just the whole Unreal, right?

That is now... But even when you're producing something with Unreal, you still, even within Unreal, make a game that is like the game editor for the things you're built. Like, you're always half, like, at least my very novice experience of game development is that every time I make something, I actually make a thing to make the thing. Yeah, it's, it is that kind of a thing.

And so to the extent that there is a standardized tool set for the pipeline, it is pretty much just welded to the engine. And that may be one of the reasons that the external part never came about is because it's too tightly, like, it's, the design decisions are too tightly coupled to one engine that you couldn't really have, like, a generic one

without a lot of extra engineering that there was never a team, there was never an external team good enough to figure out how to do that in a way that would be, flexible. And I can speak from a little bit of experience there, actually, because for many years, I did Character Animation Library that included the pipeline part of the tool. So it included, like, the exporters for Max and Maya. And this tool is still in use today. I found out, like, it was used

for Balders Gate 3. I didn't realize that. So it's even still in use today, I guess, even though it's been 20 years since I made it. It's pretty cool. Actually, more than 20, more than 25. the pipeline part trying to make that tool so that every studio could use it was a massive part of the engineering that went into that tool because it meant that we supported many art tools like you could export for Macs, you could export for Maya, you could support for Lightwave, you could export from your own tools. But also the data formats had to be super flexible.

So everything was configurable in there. You could say, like, I want this to be compressed and I want it to have these data members and I want them in this order and in this structure and all that stuff. And all of that stuff had to be flexible and configured. And you couldn't do something like we're going to store it in JSON or anything like that, right? Like that was all completely, you know, that would be a complete non-starter. It all has to be super efficient, super bite-packed and all that sort of stuff, right? And compressed. Casey, do you have any other things you want to finish up on that?

No, that was just giving you kind of the two, the two, I was just trying to lay out the two prongs of like where a lot of the engineer. effort goes when you're building engine stuff and why you would need a lot of people, right, to do something like this. And so this is also why I say it's very hard to comment on what the likelihood is of them producing new stuff or other kinds of stuff without knowing what the prior makeup of their team was for doing that technology and what it now and how many people they have now. So, you know, if it could be that they still have plans to move something forward. It could be that no, they just got rid of everybody and it's like, nope, this is just going to be like maintenance mode until no one's using idtech anymore and then shut it down you know

and we could we could easily make a judgment call on that if we had those if we could could see like personnel list before and personnel list after but we don't have that information right i was reading somewhere that them laying off the idtech folks or individuals is because they're potentially going to pivot to unreal engine which is more industrial standard and you can get cheaper support and more people know it So that's what I read somewhere. I don't know if it's true, but it sounds like from everything you just kind of explained, it sounds like maybe that is a better idea.

I don't know. Casey, can I ask you something? Uh-huh. Is Unreal Engine the React of game development? Because how did he just described it, which is like, oh, it's really easy to hire for, you got a lot of people that already know it. So I should never use Unreal.

That is like, I think that is probably true in more ways than you are even thinking it is. So Unreal Engine, I don't have any experience with it, so these are not my opinions. I'm going to just try and give you a summary of, like, I think what people generally would say, including even some of the people who work on it. The Unreal Engine is designed with a very specific philosophy, which is basically like anything goes. The idea in it is that whatever you want to try and do, you should be able to do it.

And this comes at like a sacrifice, basically, of, you know, efficiency and consistent performance and things like this. Because you have to be able to do things like, oh, if suddenly in the middle of this game, I want the user to just be able to pick some random thing from the internet that's going to be the new shader that they're using for their character's skin, that just has to work. Like, it can't be a requirement that it has to go through

some kind of institutional baking process back at HQ or any of this sort of stuff, you have to be able to just throw things in without like a centralized decision-making kind of a thing. And that's even true of like augmenting it and putting it. So a lot of the decision making unreal was just like how do we get everything in there? Like anytime someone wants to throw in a new thing, it goes, you know, it's like the, if you've ever seen, if any of you out there are key and peel fans like I am. If you've ever seen their sketch about the Gremlins 2, like, they're going to write the screenplay for Gremlins 2. And there's this guy who's there who's like the...

I miss this one. Yeah. It's... It sounds great. Okay. So, for those of you don't know, Gremlins 2 is just a ridiculous... It has, like, it has, like, nothing to do with Gremlins. It's just completely ridiculous.

And so what they did is they basically pretended the Gremlin's two writers' room was, like, fairly normal. But then this guy who's, like, the Hollywood sequel doctor comes in. and he is like working with them to make it, you know, better. And it's absolutely hysterical. So please go watch that sketch. Anyway, that is the unreal methodology. That is the unreal idea.

And it's been very successful for them because it's why they can do all these like fast follow things. Like it's why you can be like, oh, we had Fortnite. And now it's like, turns out it's a battle royale now because PubG was big. So like next month we're just going to throw it in the rate. It's like, and so they, the end result of that is it's an engine that lots of people can use.

Like it's very broad and allows you to do what you want to do, but it's kind of janky as a result, right? Because it's like, yeah, everything is just kind of going in there and there's a bunch of really good devs who work on it who are trying to like clean up certain parts or make certain parts more performant or more reliable all the time. So they're constantly like bailing water out of, of the boat, like, then there are very good people who are doing that.

I know several of them. Some of the very best programmers, like people I would point to be like, if you were picking a team of the very best programs, I'm like, you'd want that guy, that guy, that guy, and a bunch of them are all at Epic, right? And so it's not like it's being made by people who don't know what they're doing. It's actually the opposite of that. It's just that the philosophy there is full speed ahead. Everything goes in.

That's the way we do things. It's about complete flexibility. It's not about trying to get it down to like a hardcore technical, like, a set of requirements and optimizing around them or anything like that. And so the end result is like it probably is a lot more like React than you would think in the way that you were talking. Like it's like, this is just made so everyone can make their thing. And there were probably some good programmers on it.

They could only have a limited effect on something that's moving this fast and that's used by this many people, you know. And that's kind of where unreasonably. is, right? With that, I'd like to introduce some coding guy. For those that don't know, this is now officially become the X-Flix and Netflix plus KAC podcast. Guy also was at Netflix with me for, what, six, seven years?

We overlapped. Something like that. Yeah. Was he TV, too? Yep. I was in TV. He was in TV. I'm inheriting both y'all's mess.

Nice. Yeah, you, that's, that's your bad. Wasn't my mess. Trash is like the last man standing. He's going to have to fix like the last bug in Netflix and it will be down to Trash who has to find it. Trash, I want to be clear. I am the only developer from Netflix that is net negative on lines of code.

My last patch was I was like negative half a million. Okay, so believe me, it's not my mess. I'm such a janitor. He just kept deleting the package Jason lock file. Just like, no, stop it. All right. Yes, that's also JavaScript on the television. just happened. Okay, so with that being said, you are now joining us on the next portion,

and so we might as well start off with you. For those that don't know, some coding guy has a very long coding past. He has a more decorated past than many people out there, legendary systems programmer. Work with Brendan Gregg on the performance team at Netflix, found patched, what was it, stacked races or the colonel to be able to show RXJS or RX. groovy. The darkness. Those were the dark times, man. You're bringing up an old wound.

I know. It hurts. The Falcour days. Okay, those are days that we all lived through. I applied the pain. You accepted the pain. Okay, so with that being said. That's true.

That's true. That's a fact. Oh, my goodness. I pretty much moved from TV into performance. That's when I was in Brendan Gregg's team. And I was pretty much there because of this. Like that is kind of like the trajectory that sent me off. I was like, I joined Netflix.

I was like, yeah, I really want to learn a little bit about UI. You know, TV's pretty cool. They're like, yeah, if you know how to code, like this is like the most unforgiving platform. I'm like, oh, I'm fine with unforgiving platform. Let's go. And I joined there. And then like I saw, I saw what was happening. I saw how the sausage was made.

And I said, oh my God, I have to move into performance. And I was like, I was like crying. There's too much forgiveness? I was like, there's way too much forgiveness over here. This needs to be less forgiving. And I'm classically trained, by the way. So I was there doing that and basically had to fight. I was muffled like regularly.

And so my only ability to speak was generally at hack day. So I had to like encompass everything that I thought about everything we were doing into like a two minute hack presentation. And I was lucky that one day I did get to invite the Primogen himself to join my hack team. He actually deigned to come join me. and my hacker mates when we got Honey Badger. We went totally Honey Badger on the old system, and we just said.

When Prime, like, sullied himself by coming down to talk to you, was he wearing that King outfit that he wore at the tower stream with the little crown and the little road? I will join your team. He did that whole walk-on, like, you know, in Hamilton, what he's like. Yeah. Well, Prime's desk had him as, like, a, Your little doctor outfit.

I remember seeing your little cut out of a picture of you next to your name. Did he sing a song like in Hamilton too? Yeah, you know, that, I don't know. To be fair, that was also the only hackday guy you won. What was it? No, I won again. I won again for the telegraph, the telegraph. The telegraph, Kate.

My bad. We had a race back in time. Like, this was one of those, like, they were saying at the time, like, Netflix is never going to run on this platform from Japan. that I'm not allowed to mention, but it's from Japan, and it's a console. And anyway, it was like, it wasn't going to work on there. And I was like, it'll totally work on that platform.

And then they were like, no, it's not going to work. And then I was like, I'll go back to the start of that platform and make that thing work. And I was like, I will show you Netflix on the original Nintendo, which did not win. Netflix on the original Nintendo did not win. But years later, like, that started sort of like trouble with another team. And they basically were like, yeah, we're going to go back, like, further in time. like to, you know, if you want to play the retro game, I'm, oh, I'm in. And so they went on to like a Philco TV, like, and they had like the tuning knobs,

like the channel knob, like that was, and the volume that controlled where you were, like, in the Netflix app. And then I just went, I went, I said, fine, we're going to go to the start of communications. We're going to have a telegraph key hooked up to Netflix. I had like, I had a retail PlayStation. I built a USB adapter, like some raspberry pie and some bad stuff. And then, you know, I just morse coded on stage, like just typing in that we, needed to make firefly season two but that's um that was a and i won for that okay so then

honey badgers after that but to be fair just so everybody understands hack day also really secretly means hack month uh it's not quite hack day we did most of our stuff like we didn't we didn't pre hack a lot but there was some yeah the nintendo hack definitely had prehacking there's some prehacking um okay so with all of that said this is guy serino known as some coding guys, streams on Twitch every now, then making a game right now. Guy, what's the game you're making again? Gravity matters. So this is the space part of

space and body physics. You can fly in space and not go in a straight line and it drives me nuts in like older games. But anyway, that's a different topic. Coming out of early access later at the end of the summer. So that's probably a good time to go tune in on that. It'll be on Steam.

So this part that I would like to talk about a little bit, I think is going to be Casey, you're probably going to be kind of invested in this one because you don't really have kind of the same, maybe the same corporate experience that trash guy and I all have, which is I.E. Netflix. But we also don't have this level of corporate experience either because this is a very beautiful phrase. So this is later down in the long message sent by Asha. She says the following right down here. We know that great technology gets better when it gets simpler, not bigger. Today, some parts of the

company work passes through as many as 14 layers of management. It's like a Gop. That's Xbox. Okay, 14 layers of management on Xbox just to get something done. Our platform teams are 40% larger than they were at the start of this generation, even as our player base and player time has declined. And then what she says is that they're going to reduce management down to five and where three, if possible.

And so I just have a very simple question here, which is, how do you get to 14 layers of management? Like, how does that happen in a corporate structure to the point where that can, that can happen? So here's my theory, which is that middle management is self-preserving and grows like bacteria, meaning that middle management has to get more middle management underneath it to justify its existence. And middle management itself will never say, hey, I think we're too large. Because by saying that, they themselves mean that they have to destroy themselves. So it is, it is a self-propelling virus.

that happens at companies where people grow this middle layer more and more and more until at one point someone looks back and goes, how do we get to 14 layers? Like, that's the only thing. But then I also have to realize that how did the C-suite go? You know what's really good? 13 layers. Like, where we're at right now, this is, this is cruising speed. Like, how did that ever happen? So I do want to interject one thing here, if I may. Yes. Which is that one way, so I absolutely agree with all of that. And the fact that it does seem like, you know, your sort of status is about how many people are underneath you. So you keep, like, creating, like, these... You try to org chart your way into you being on top of the biggest org, right?

And this is how I know for a fact that no talented computer scientist ever has become, you know, I guess I would say three levels of management high. because as soon as they had three levels underneath them, a CS person would make the ultimate power play and have one of the people at the leaf report to the person who's won down from you creating an infinite cycle where you could say that I have an infinite number of people underneath me. They're going to do a quick AVL rotation to have the most balanced possible tree? No, no, no, not balanced, just cycle.

No, he wants a graph. Right? So it's just a soft. cycle so you can just say look how many layers of management are underneath you and you're like an infinite number. It's actually like I like there's an infinite number of layers of man there's an infinite number beneath me. You can't get to the bottom. Don't try to walk the tree. Yeah. If you walk the tree, bad things are going to happen. So like I guess here's a question for you guys that I'm interested in. What is Netflix? What is the depth that Netflix? When I was last there. Can we even say that? Oh, you know, can you even say that?

Oh, is that is that is that? I don't know. It was relatively shallow compared to this. It is. That's as far as I can know, that's in the culture deck is to have a fairly flat thing. I think they've talked about, like, keeping management rather flat. As far as I can tell, it's rather flat comparatively to at least this. I don't know if I can say exact numbers or my experience, so I don't want to say anything, but. Okay.

I would say that, like, you guys discussed. Okay. Yeah, I would say, like, to Casey's point, like, it is the flattest company I've ever seen at that size. Like for the number of people that are there, it is very flat. Now, I don't know how much has changed. I mean, I've really been gone since like 2018. So like, you know, that trash would probably know better. You said 2018 was the last time you were there?

Yeah, I mean, I contracted after that. But yeah, I mean, that was leveling. You know, when leveling came in, I was like, all right, you guys go do leveling. You know, I'm going to go do leveling on Final Fantasy 14. And I got good at that. But, you know, I didn't do leveling at no place. So I was like, yeah, okay, bye. Netflix is relatively flat.

Pineau's flat as when you're there. I don't want to go too deep in what Netflix is. I can talk about how Disney Hulu was. I think they're generally like a little bit more. I heard they're way deeper. Middle management, but I've been a part of many companies that have these lasagna layers where you basically,

okay, here's one. I was at Capital One. And that thing was just like middle management, hell. And just to make one decision of like, can I ship some X product or change the color for button or something? Would take like three weeks to make a decision because what happens is you talk to your supervisor, your manager. Then they realize, they're like, okay, let me go bring it to my manager.

And they bring it to their next manager. And it takes like two weeks just to reach the VP. God knows why we need the VP's answer on this. And then you're like, no, you cannot. And you're like, well. And then it's got to come back through the chain. And that whole time, you're just sitting there because you don't even know what to do or what you're allowed to do. So funny story when I was at Capital One, I was there for one year.

I couldn't take it anymore. The thing I started on didn't even hit production by the time I left. That's just how long it takes. It's like a lot of red tape because, you know, it's... How complicated. Let's color this a little bit. Because, you know, a year not to production, right? How long were you at Capital One?

One year. Okay, so a year not to production is not the most insane thing I've ever heard. There's plenty of things that don't do it. But how, in the grand scheme of how simple this was, if it was you with, unilateral decision making. How fast do you think you could have got it from no knowledge to production? I mean, it was probably like realistically, by a couple months for sure. Like it was pretty complicated. I was like in the identity space. So we had to make sure like fraud. We had like systems that do like fraud license scanning, you know, like two factor off or whatever we had to do.

But it just took forever. And it was just like, I've never been in a place that moved that. So I was like, I got to get out of here. No, we had. It was insane. We had the exact. We had the exact opposite problem at Netflix. Like, like people who had just joined, the minute they had access, they could just take the whole thing down. I mean, like they get, yeah, I'm going to push this and it's, it was just live. I mean, I brought it down. I'm not going to mention names, you know, like, well, pre-netflix, we know that Prime managed to take down the entire system using only a comment. Good luck doing that anywhere else. No one else has ever managed that. I saw nothing. Okay, And, yeah, I saw nothing.

I mean, I've seen it, like, go. I mean, at the time, like, when I left, they were like, you know, maybe we should put some safeguards in place because, like, you know, it's kind of like one click and just everything's just gone. Like, you know, so maybe we don't want to do that. And I was like, well, I mean, they shouldn't be clicking. I mean, why aren't they? You know, you got to get like, you know, I mean, I was like, you know, you should be,

you should be typing for this sort of thing. But anyway, like, that, that was just, they, they added a lot of safety. They would, you know, again, like one of those, like, you know, make, make it so that people can do the right thing without trying to get in the way. But when I went back and contracted like a couple years later, it was a bit different. You know, I mean, it was kind of, there were guardrails on everything. So it was. So give you a little idea. We had these things that you could adjust like production values from a dashboard.

And at some point that I think I, you were gone at this point. It was like 2020 maybe. Someone adjusted a staging value. So a value that should not be in production that's in a different environment, adjusted that value and took down production for like some amount of time. And so they're like, that's it. We got to figure this out. No one's adjusting properties now.

Yeah, those fast properties, that was a frigging nightmare. Anyway, so enough inside baseball. I have a comment. This is why I think like my Microsoft or Xbox is in the state they're in, if they have 14 layers of middle management to prime's point about everyone's about self-preservation, those environments get so toxic because each person has their own agenda. So it's really rare for these teams to kind of align because everyone's like, I want the credit

for that or I want to do this so it makes me look better. So what happens is you just make no decision. You kind of just standing still and everyone's just arguing about what to do. And I think that's like a big part of like Xbox's downfall. Like the fact that they have 14 layers, there was like a meme that Began shared where it was like, this is what it's like to go through 14 levels of improvement. and you're just like saying random names. Like, yeah.

And I've seen it like firsthand. I've seen like the politics around engineering managers wanting to take credit of everything and basically trying to poach engineers from other teams so they have more people underneath them because it's more about politics than actually delivering business value at that point. I'm not sure if you all've seen that firsthand,

but it's pretty insane. I mean, I used to work at Yahoo. Microsoft too. Microsoft in particular has this and everyone kind of knows that. So, like, it is not better there. If anything, it's probably worse than what, you know, people are thinking.

That's such a, like, a positive white pill take. You know, whatever you're thinking, double it. It's probably that bad. No, it really is. And I think that's especially true. Like, one of the things that happened as well, it, on,

one thing that happens at Microsoft is there's definitely like a people moving towards the thing that has the momentum for the same reasons. So like, you know, if you look at the company, the gaming division, the operating systems division, these are not hot divisions anymore, right? So you end up in this situation where the managers, the people who are trying to, you know, have the big, have the great resumes and all the sorts of kind of thing that Trash is talking about. They also, like, have a lot of incentive to go work in the AI part of things, in the cloud part of things, right? Whatever is the hotness, you want to be associated with that somehow, right? You don't want to be associated with, hey, I, like, just kept, like, you know, I did a really good job, like, fostering, like, our indie game development studios that we have or something, right? Like, that is not, like, going to make you a vice president at Microsoft.

You know what I'm saying? Like, it's just, it doesn't really work that way. And so I think that's probably also another issue that you run into with something like this, where it's like that's the reality of a large company. They're never going to prioritize the kinds of things that a gamer might look and say, this is what I'm hopeful about or what I care about. Can I ask a real question? Sure.

Is Halo 1 remake going to be good? I have no idea. What does that have to do with anything? I know. Microsoft phones in there releasing it soon. and I'm freaking out, okay? I'll be honest. I didn't think Halo was that great.

Okay, which Halo did you start on? The first one, like the OG one. And then, like, the last one I played was the firefight or whatever you called it. And you have to, like, survive the waves, the one that had that way. Okay, yeah, that's like ODST, I think. Yeah, that was the last one I played. Okay. Modern Warfare, too, best game.

I mean, so at the risk of making, this on topic. I think like for people who are looking at this I would imagine that most of what's going on here is just like game pass and floating, right? We talked about this a little

bit last time where we were talking about the games as a service or gas as it were you know the whole like are you going to own nothing and be happy is all your stuff getting it streamed to you.

There was the Lori Wired tweet that we were commenting on there, right, and all this stuff. So, effectively, this is mostly, I think, just GamePass was a bad idea and it completely failed. I think that's all that's really that we're seeing right now. And so it's, I think

it's probably hard to make sense of this as anything beyond that. Like, Microsoft made a bunch of decisions that were all about GamePass. Game Pass is the business model. It didn't work, and now the question is, what do they do? Right? And so I think that's the easiest way to probably understand this,

and I don't know that there's a lot more to say about it at this point, because until we actually see what they are going to try to do about that, I don't know. And the reason that I think that's the important part is, A, everything they've done over the past 10 years has been, like, about Game Pass. I mean, there's no, there's no rationale whatsoever for a company like Microsoft to acquire double fine studios. It makes literally no sense at all in any context. Other than the one where you think what's going to be happening is a bunch of people are

going to be subscribing to you to get their gaming and you want to show a diverse lineup of games across a wide spectrum so that people who maybe aren't your typical console players or something like that, are still going to subscribe to your service, right? Otherwise, there's no point in buying a lot of these studios that they bought. It makes no sense at all other than, oh, we'll just get Double Fine, we'll make a bunch of games, they'll be sort of noteworthy with critics or whatever, they'll round out a part of our lineup that we're going to need it. They're not, everyone knows DoubleFind is not going to move a console generation. That's just a given, right?

Apologies to Double Fine, not trying to diss them or anything, but that's not what they do. They don't make Grand Theft Auto, right? That's not their job. And it shouldn't be. But so a lot of these moves that they're making over that time period don't make any sense unless you're thinking about Game Pass is this subscription service. We're Netflix. We're going to burn a lot of money in the short term to show that we have a wide catalog.

That's a lot of breadth. And that every month you'll get a game. And it's very varied. It's not just one kind of game. We'll have the tent pulls. We'll have the quirky stuff. We'll have everything, right? and it didn't work, right?

It did not have any growth potential, apparently, and it just, that was it. So the problem now is, what is the argument going forward? I think that's the position that they're in. Again, this is data-free, because I have no inside knowledge whatsoever of this. So I'm literally just commenting completely from the outside.

But GamePass cratered, I mean, didn't crater in the sense that it, you know, went to zero or something, but just like cratering in, in terms of what happens in a business, if you need something to be this exponential growth thing and it actually is logarithmic and just stops, that's what we're calling cratering.

I'm going to hold you right there, because if you look at what her tweet says, again, it says, we have also learned that we are not the best home for every type of studio. In a typical year, we lost 64 cents for every dollar we invested. And this is talking about,

this is my assumption they're push into game past, like buying and purchasing all these studios to put underneath and all that and then the outcome of it all. it was actually super bad. And just to try and like, again, put on my, like, imagining what the executives are thinking at various times, because it's just imagination I can't know, right? You can see, like, what they say in like, you know, in like earnings calls and in press releases and stuff, and you just have to kind of back infer like what was the actual ceremony. But so if you think about it, it's like Microsoft is this massive company, okay?

Like trillions of dollars company. So how do you make a ton of money in games? Like, how do you make money in the billions? Because if you're not making money in the billions, there is no seat for you at the vice president's table at Microsoft, right? That's not a thing that's going to happen. You're an also-ran little tiny thing that no one's paying attention to and you won't get any funding and whatever.

So the way you make an argument for you're going to be big business is that you're Netflix. And that was what they did, right? That's the easiest way to understand it. is that we are Netflix for games. You're going to subscribe to our service. We're going to have Netflix like numbers. So we're going to have that kind of income and revenue. And that's why I'm a vice president now, right?

Does that make sense? Like, I'm pretty sure this is effectively the way it is, right? Because we have to come up with a reason why this division is more than just like, I don't know, we sell some consoles every five years and we make a little bit of money on the, on the VIG of like digital downloads or whatever, right? That's not enough. They need to, they need to be,

it needs to be huge and grand. And so when, sorry, I just have, I have a quick, quite, just like, just from a practical standpoint,

why doesn't the Netflix of gaming work? Because obviously the Netflix of Netflix worked. They're making money. So just why, everyone has been the Netflix of gaming, by the way. I mean, like every,

I've heard that so many times. Like, I mean, Gamefly was the Netflix of gaming. Amazon was the Netflix of gaming. Microsoft's like, yeah, we don't even care about hardware anymore. We're just going to be like, it'll just be, we'll follow you. Xbox is like a concept, and we're just going to be on every platform wherever you are.

And like it just, none of them have like any of like the elements of like the Netflix part of like, you know, a seamless experience, not making it impossible to cancel. Like, I mean, finding out signal from your users like what people really want and like doing that and doing it really well. And I haven't seen that at all. I mean, I've seen a lot of, like, expensive acquisitions. I mean, I was a Activision shareholder when they picked that up. And I was like, I don't want to own this thing. I mean, like, this is, like, here was something with, like, a bunch of products that, like, kind of made sense. Yeah, I have some misses and whatever.

And then there was, like, all of a sudden this behemoth that's just burning money faster than ever on, like, open AI. And then it was like, oh, yeah, well, Xbox is like a virtual concept that follows you everywhere where you go. And that's why we don't need to be worried. about like the console and the hardware and all that you know and we're we're too tied to that and that's why we're going to be all subscription and the Netflix of gaming and you know i was like and then their cloud platform version of it too that they would like i mean they admitted during the the whole like acquisition trial that they were like you know when they were when they were when justice department was looking at it that they were like yeah there's basically nothing there

okay there's like nobody is actually subscribed at using that product so it's just i don't know i don't see it. Well, I guess Prime, it's a hard question to answer, but I'll try to answer it in two ways. The first way is that if you take a look at gamers who are, for lack of a better term, variety gamers, I think they're already very well served by Steam. What is your monthly subscription price? Like, let's ask that question. Your monthly subscription price to something like Netflix, is it, you know, I don't know, maybe $20 in the U.S. or something like that, $25? I'm not sure what it is for like this kind of... We have an ad tier.

There's various tiers, but yeah. Right. So if you look at that and you ask, if I wanted to play games on Steam and I gave myself a monthly budget of $25, what could I afford to play? The answer is a lot. So not only can you buy a lot of games on sale for $5, $9, so you could buy multiple games during Steam sales that you,

you know, that build up in your, in your catalog. But also, you know, someone will buy a game like Bellatro for $10 or $15. I don't know what it cost even new, not on sale. And that's 50 hours. They might sink into that thing.

50? They don't... Some people are... I'm talking about the on average, even average people dumping 10 hours into Balochro easily for people who didn't even, weren't even hardcore players of that game. And so you're talking about something more like

Netflix. It's like Netflix, is selling content that you subscribe to and just dabble in. It's like, I don't know, I just, I show up, I pick something randomly from this stream of things, and I can watch it for two hours and shut it off, right? The equivalent of that would be I buy a $20 or $30 Blu-ray, I guess, and watch it for two hours and I'm done. Netflix starts to sound like a pretty good deal at that point, right? it's like, hey, this is sort of fulfilling the same thing.

It costs less. I get more selection, right? So for variety people, it kind of seems like I can see the value proposition for Netflix. I don't see what you're offering over Steam if you offered a similar thing, right? For the hardcore gamer, which is the other prong of that, they are like, I play Fortnite 24 hours a day. Yeah. I play Grand Theft Auto 24 hours a day. That's what I do.

I don't care. what is Netflix offering me? I can load up Fortnite for free. I play with all my friends. I play it for several hours a night. If I want to spend some money, I'm going to buy a skin. What possible thing can you offer me as part of this Netflix subscription that's better than free?

So I will most certainly say that there's a whole group of people you'll never be able to compete with because they're single game andes, right? They're like, I play Fortnite because Fortnite is my identity. That's all I know. That's all I am. That's all I'll ever be, right? So yes, I don't think that's... And that's most of the money prime.

That's most of the money in gaming is those people. By far, the lion's share. Okay. I see, I don't know where the money comes from and all that. Because the only reason I'm saying this, and this is coming from a genuine question is if you look right here, Netflix content budget for 2026 is approximately $20 billion. I assume you could make a lot of games for $20 billion.

That is your exclusive games that you own and is on your platform. And if you did it for 10 years, investing, starting off with $5 billion, and investing in creating, increasingly more for 10 years straight. I assume you would have an incredibly diverse, rich catalog of all these games with monthly games coming out constantly that are all unique and bespoke to your environment.

I don't really understand how it's not possible to also create the Netflix of gaming. This is more from just like a purely I don't, I must not get it. Just look at the track record. I mean, oh, sorry, go ahead. No, no, no, go ahead. Just look at the track record.

Amazon, I mean, how many billions did they spend? Literally trying to make those games. I'm not talking about Amazon. They did rings of power and wheel of time, okay? They've just been known to flop, all right? I can't possibly try to say that they know what they're doing, okay? That thing was awful. All right, well, even Netflix themselves,

have you seen how much money they've dumped into games? And they have not produced a single one of those titles, and they're not even close to it, right? Interesting, interesting. They actually, so they pivoted because they realized that they're not really going to be a AAA kind of player, you know? And their strength is really like around distribution. You know, they have the reach.

I mean, there's something like 500, 600 million people watching Netflix globally. And that's a window like we've never seen. And that's the kind of place where, like, you know, the Steam model of sort of like, you know, not actually Steam, but they went more for like the casual gaming part because putting big money against an unproven part of the business without, you know, leadership that has like, that's figured out what they're going to do and they don't really have a direction. It didn't make sense. They were just kind of throwing money away.

And so they just cut that back and they say, you know, it makes sense. a lot more sense for us to like do a deal and you know take grand theft auto on the platform and you know here it is with like a new version and whatever you know and and that would be like you know we've just fixed a bunch of books and that was just you know if part of that like unwind like you're just you want something to watch you don't want to you know you don't want to be too involved you probably don't want to try a new maybe you do i mean and that's where they went after like the casual gaming segment and that's been doing all right i mean from you know the most recent earnings calls i i don't work there anymore so i i i have just the outsider view on it now. But like strategically, that made sense. Yeah. I'm staying out of this

conversation. Yeah, no, I mean, Steam, I mean, I think to your point, Steam is way more in line with the kind of philosophy around, like, it doesn't, it's not painful. You know, like that, they've got the user experience kind of like top of mind. Like, you want to just like run this client. You don't really care what you're on and you just want it to work, you know? And if you've got all the fancy stuff, you want that to work too. You want the overlay. You want the standard control. You want like different things from the community. You want all of that integrated. And Steam just, it follows you and it goes to different platforms.

And Microsoft strategy was always like, you've got to make this thing look like an Xbox. Even if it's not an Xbox, make it look like an Xbox and make it look like Windows. And there's a whole like, you know, again, because that's their ecosystem. That's what they knew. That's their DNA. They wanted to be that. And then not hardware. And then they had hardware.

And then it was all just like competing with themselves around like, okay, now we're like this virtual company with your catalog. you can't really get to, but you're going to get to it and buy it all again. I mean, it was just, it was nonsensical strategy versus like, Steam's like, okay, you bought the licenses on this and like, okay, you're on another computer, you're logged in, right? Great, grab, here's your game. Like, and it was none of the experience of, like, dealing with, like, AAA installers or anything else. Like, it just, it just worked.

Well, as opposed to, like, you know, the free play, you know, service, you know, like the stuff, like the fortnights and things like that where they're like, okay, well, the cost is zero so we can actually worry about. the customer experience here. But Prime was talking about AAA stuff, right? He was saying, no, no, no, I was just talking about gaming, right? Like, this is your balotros, all this. Maybe you do have a couple tent pole titles, right? Like, Netflix also has some tent pole titles, right? You look at the big name show, the Witcher, all these things where they spend hundreds of millions of dollars to make that one individual show. Like, I assume this also, the exact same model would

just map onto games. Like, okay, here's our $1,000 million games. Here's our $110 million games. here's our $10, $100 million games, right? It's just like, here you go. Go do this. Okay, so first of all, there's, I guess what I would say is the, when you, when you think about the budgets, think about more like $750 to $800 million, maybe a billion dollars, maybe more,

if you're talking about competing in the actual space for the high end dollars. So when you're talking about going up against G, FTA, Fortnite, Roblox, their expenditures are not $100 million. They're not even close. They're so far above that. So if you go into one of those things and you're like, we're going to compete with those guys for the high-end dollars, you're talking about laying out, you know, I don't even want to know what it is, but it's going to be, it's going to be way more than a billion dollars total over several years, probably several billion dollars total over, you know, the five years it will take.

you to even get to some place where you might start knowing if you're able to compete, right? So there's a much bigger gulf than what you're talking about. And down at the lower end of the gulf, Steam just has that entire market right now for PC side. And then on the other side of things you have like locked up storefronts. It's like if you're talking about competing with the Apple store on iPhone, have fun with that. If you're talking about completing with the Play Store on Android, have fun with that. Now, maybe because Epic did a bunch of lawsuit work for you, you will be able to do that at some point. But, like, currently, if you've tried the Netflix experience for, like some coding guy was saying on the pivot there,

where they decided, okay, what we're actually going to do is sort of just let you download games that somebody already made, that you then just put in your Netflix login to the game and you use it. It's a horrible experience. You have to go to the Netflix application. You have to look through their games tab to find something that you want. You have to click on that, which takes you to the store. If you're lucky that works, you download the game. You have to have your Netflix credentials entered into the game.

It's like it's terrible, right? It doesn't work, right? That part, I can speak to that. So I haven't really used the game product, but they definitely had a problem with, you know, those storefronts being so locked. down. Exactly. The major fear from the smartphone providers was basically like, you're not cutting us out. Okay, you don't just, don't just install stuff. Okay, because like we need to have all that, which means you have to go through us, which meant like all this deep linking crap that

never really worked. Exactly. Is the experience. And like, that's not a good. I can only imagine the service to be able to like have a Play Store as an application on Android or whatever it was. Exactly. And so, so, you know, again, that's like maybe that can now be some. thing that's pushed on because there's so many lawsuits and antitrust stuff, maybe in a few years there will be some kind of a like way that you could envision somebody deciding they're going to try to compete with Apple and Google there by having the sort of integrated experience that's actually good. That could happen. But again, like that's all, you know, if you're asking why it hasn't happened, it's because it couldn't. It was like literally prevented from

happening. There's no way Netflix really could have shipped something else as far as I know. Because they were kind of prevented, right, from doing so. It was cloud gaming, you know, basically like, okay, we already have you on the TV. Like, you know, we already, you know, so pull out your controller and we could just make this work in the same app. And that is the one place where they could actually hit the experience. And Netflix's CDN is basically the largest in the world. I mean, it is a very short hop to just any Netflix. I mean, you could test that all day on like fast.com.

I mean, it is like really, really comprehensive. So, like, they do have an answer to that. They'll never have an answer to the stores as long until maybe more lawsuits or, you know. Well, also, the streaming doesn't really answer the question, though, for mobile, which is sort of where we're talking about here, though, right? Right. Is my point? Like, because on mobile, you're on unreliable internet.

You are not going to be streaming, like, your game experience to there in a pleasant way, right? Already streaming movies already sucks in that way, unless you can buffer them. So it just doesn't really work. I can talk a lot about that because I'm the one who got streaming to work in Kazakhstan and Uzbekistan. like on a 3G connection. Like I mean, this is a near and dear topic to my heart. But it will always be a, I do agree with you. It will be a subpar experience.

If that's going to be the only answer is you can't run anything locally, then. Yeah. So that, but that may change. Because like, again, if the regime changes and it becomes possible for people to actually supply store experiences where you just download the Netflix app once, and now it allows that app to pull down game data and run it, which is against, which they do not like, just to be clear for anyone doesn't know. Apple and Google do not allow you to do that.

That's the reason that the Netflix games, I mean, I don't know the reason internally the Netflix games, but I mean, the reason that they could not, uh, it, that they are not allowed to do anything like that, uh, is because you're just not, it's simply disallowed to execute any code at all,

uh, that you download as part of the app. That's just simply not, uh, not, you know, permitted. Yeah, they want to make sure you're going through their store. And, and that, that is locked up. pretty hard. That 30% is delicious. All right. It's not just the 30% though because even if you consent to the 30%, they still

will not let you, unless they've changed this, they will not let you execute code that was not like signed by them as a separate package that's distributed as part of their store. So you can't have like these packages that you yourself are adding. They won't allow that for security reasons, I assume. So even if

you give them the 30% cut, I mean maybe if you if if you backroom business dealed it sure right like if it's like hey apple like maybe but but you know why do you think that wasn't what happened yeah let's not talk about that it looks look no one's paying 30% all right anyway moral the story is that yeah I agree with you like if you're following the rules like it's going to be a problem exactly all right I just I was just more curious about that because I just to me like if it's purely it's so it's you know like how wouldn't this work? But I guess if you're talking about mobile and that, then yeah, that makes sense. But I don't know. I'm still curious if it is actually possible to work. But it seems like it isn't because

these companies are failing, but also I'd just expect Microsoft to fail. Right. Like if you just said, hey, Microsoft's going to solve this problem. I'm going to go, okay, it's going to be bad. Right. Like, that's just my natural intuition of a situation. I mean, I think part of what made Netflix work was the fact that we had no hardware. You know, like that was a hard stop from Steve Jobs. You know, He basically said, you're never getting on the iPhone if you sell. We had what was the Roku box, you know, like, and they said, if you, if you sell that thing, you're never getting on any of this. And that was very clear to us.

And we basically said, okay, well, we want to be like a software cup. We want to be on everything. So that means, like, if the only way to do that is we don't sell hardware as well. And I think that's a part of the recipe. Like, you know, as long as Microsoft is selling hardware, which seems like they're doubling down to go back. And hardware makes a lot of sense in the company. console space, then it's always going to be kind of a suboptimal. It's never going to be that like Netflix of blank experience because like it just you, your goals are really in conflict.

You know, you want the hardware sale, you want the install base, you want the exclusivity. You don't want an experience that just works seamlessly for people to be able to travel between platforms and have cloud saving that like just works and, you know, things like, you know, if you patch the game, then your patches just come in and everything. Like that's not your focus at all because you want to make sure that it's a wall of garden and that people are essentially trapped on whatever device. And if you go on to another device, you're going to pay for another license.

And that's that type of thinking, which is exactly not what made Netflix Netflix. And again, just to really underscore the point about where the dollars come from, because I guess that was a thing. There's literally nobody that I know of who's like, you know, doing sort of the executive advising sorts of stuff.

at these companies who won't tell you the exact same thing, which is that all of the money is in basically like the sort of the big attention games. That is where the vast majority of the revenue is generated on the sort of like anything outside of phones, which as we've already talked about is its own wild garden thing that you don't really have the option of poking at. So when you look at things that's like, why doesn't Microsoft go after this market or why doesn't Netflix go after that market?

It's like, well, they also look at those numbers. They know that the money comes from Fortnite, Roblox, Grand Theft Auto, Overwatch, League of Legends, right? That is where it comes from. It doesn't come from anything else. It's just like you can draw this circle of like all the money comes from these N, always on live service things that are very hard to assail because now everyone, there's like a social kind of capital built up there where you get together and you play those games

with your friends regularly. It's hard to, like, move people over to something else. So that's where all the money comes from. And so it's really, really hard to go, like, well, why don't you just, you know, why don't you just spend a few billion dollars and make one of those? Because what if it fails? No one wants to hear, like, we're going to put $5 billion into this thing and nothing's going to happen, right?

And, like, you know, you've seen what happened to Concord. That was $400 million, right? You've seen what happened to Marathon from Bungee, right? failed to really get uptake and that's i don't know how many hundreds of millions right um and uh and so it's it's very very hard uh to make the business case i imagine internally for that kind of thing um maybe this is how you return to netflix prime maybe you go like look here's what you're going to do you're going to give me four billion uh four or five billion dollars over five years we're going to turn towers of mordoria or sorry what is it called towers of mordoria

You said it right. Towers of Mordoria into a live service micro-transaction game, and we are going to own a significant fraction of those dollars. If you can make that sale to them, I mean, more power to you, man. I like where your heads at. I just want to say I like where your heads at. I'll think about it. If a quick a billion dollar exit, I could, I mean, I could maybe work that out.

It'd be fine. I mean, you must be honest. You might even settle for half a billion. You know, if you're on a bad day. As we still call it a billion, right? It's a half a billion. I don't want to say the M word. I want the B.

Quick question. What was like the last big blockbuster game title? Well, let's just say because it's almost November, Grand Theft Auto 6. Yeah. Okay. How about before that? What was it before that, then? Oh.

I don't really count, like, the sequels and stuff. Like, I'm talking about, like, Drain. But I mean, that's like everything. Like, you know, of like the top games, like, you know, I saw some stat the other day. It was something like the top 10 games, like nine of them were sequels from like previous years, from like the previous. Like I forgot the number, but like everything is that these days. I mean like what was the last game that like didn't come from like a sequel? Yeah, when you say big, do you mean like AAA like hundreds of millions of dollars porting like how much how much money is?

Yeah, exactly. Like one of those games like when someone says, Halo, I know what that is. And when someone says World Warcraft, of course, I know what that is. Like does that happen anymore? Like is the millennials like the last gaming? They're starting off at like the smaller, I mean, you're seeing some of them, like, Balatro, you know, you're seeing like subnotica. You know, you're seeing like, you know, the second installment is drastically bigger. I mean, is subnotica 15 like the same size as like whatever the current call of duty is?

Like, I don't know, you know, I mean, like, no. Yeah. Very, very much. Let's just, let's just, let's just say that's a hard note. I think, I think the last really big one that I knew about was Claire Obscure Expedition 33, right? Like, that was the big one that, like, everybody. kind of knew of which is not that big like it doesn't

register on the scale of like grant a indie game right even though it was yeah but it's like triple i mean it's like it's like a balder's gate you know like I mean which was a big breakthrough game in terms of budget but I mean even that was a continuation technically I mean you know like well and again

I just want to draw a line there for folks so there is no comparison in terms of addressable revenue between Claire Obscure and Fortnite. They're not the same category of game, right? Fortnite is like orders of magnitude more revenue share than something like Claire Obscure. So when you're talking about a hit game that's a game that people just go and they buy for $50.

And even if this thing, like a good example of that if you're looking for one would be, let's say maybe tears of the kingdom. right would be a good example of something that sold a lot of copies right at a premium price or something like that the revenue that you generate from that is very small still compared to the revenue you generate from something like roblox fortnight whatever you couldn't start a company that would get ipos gambling okay you're gonna make a lot of money from making children gambling i'm not you couldn't IPO on on your company just being legend of zelda right like it wouldn't happen, not like it does for something like Roblox, right? So you've seen micro transactions, like in all your games? Yes. Yeah.

I mean, Breath of the Wild did sell a lot, though. A tremendous number. Cheers of the Kingdom was more recent. It's kind of like an event versus, you know, Fortnite is every single day. Kids are just like, wah! Right, my Pokemon Go? Pokemon Go.

And so again, that's why I'm trying to draw this distinction there, because when these businesses are looking at these things, they know that. They're like, look, if we spend, we're going to spend a similar amount of money potentially to develop one of these AAA titles. We don't want to do that because the only thing it can possibly do is hit like a TIRS of the Kingdom level amount of sales. What we want is to do this one that's going to be a similar investment to that, maybe more, but that we keep putting money into, but then we keep generating revenue from, right?

So when we do get that one hit, it goes for a very long time, not just, that one sales cycle and then it's over, right? And we have to then make the next one. And it's just because the revenue difference is so large between those two when you look at their lifetime. And I ain't saying any of this is good, right? Because I don't play any of these games. I don't load up Roblox.

I don't play Fortnite. I don't care about Grand Theft Auto 5 online, which is like, you know, was one of the first ones of these. I can tell you all about Roblox. My kids play them. And I'll do it as much. It involves a lot of games where you like run on computer cap keys and you just run to earn running experience to get faster to run further down. Is Roblox like a steam where you just buy different games?

No, no, you just play all the games and then you buy micro transactions. It's like a virtual world and there's lots of... It's exactly like Fortnite. You can buy things inside this world. Robox. This is what Mark Zuckerberg wanted to make the Metaverse, right? And like Fortnite and Roblox actually made the Metaverse. Yeah, they actually.

did. But I mean, also, Casey, to your point earlier, I don't think anybody comes out and says, we're going to spend Fortnite levels of money to go build something that's going to, like, do as well as that. Like, I think that everybody who wants to get into, like, live service, because if you think about it, like, Fortnite isn't spending that money either. Like, Fortnite spent a certain amount of money up front and then grew and then started selling skins, and then that grew, and then watch the MRR and then that grew. And then eventually they said, Okay, we could throw more money at this because this is how much is coming back. So we can invest that, you know, and they could sort of play for like perido optimal

version of that to take whatever, you know, end day revenue they wanted and profits they wanted. I don't think anybody's going to go into that space saying, well, we're going to spend that much. Like they're going to go in and they're going to say, okay, we're going to spend like a couple hundred million, see if we develop a thing. Because obviously you can't go anywhere without like a network effect. And then assuming that takes off and you have a bunch of users and then something's

crowding around an event, then we can go launch some more stuff. oh hey here's new here's new hats here's new like you know digital garb that you can go sell which i'm not selling in my game by the way so i guess i'm doing it all wrong but anyway like and that's like so i think you inch your way there i don't think you just like you know i don't think we are going to see new entrance like fortnight but nobody's going to spend fortnight money to get there like i think that's just right day one you probably won't have to but yeah but i mean we do know it's in the hundreds of millions right it's 400 500 million didn't even spend fortnight money to get to where fortnight was right like four night

started off and they're just like, ah, we made a game. It's like to show off things. And they're like, what happened if we put a battle royale? I'll be fun. And then Twitch blew it up. And then all of a sudden, they're like, oh, crap, we have 10 hundred thousand people playing. Yeah, you need your servers falling over left and right. Yeah. I mean, when you get to that problem, it's kind of like, okay, crap. So yeah, I mean, it basically comes down to can you convince them to spend that money prime on Towers of Moradoria? And then it'll be a thing. The reason that I think all of this is reasonable to say and not just complete BS, by the way, is take.

a look at, go back and look at that email that you're talking about here from Asha Sharma, what are the two studios who did not have layoffs and which were mentioned prominently as reporting now directly to her? And what do they have in common? Candy crush. That's right.

The two things that are constant play that are just like, you just keep playing and playing and playing them, and that are all about like, oh, we could, we can see ways in which these have fortnightish qualities, right? They have Roblox-like qualities,

Minecraft especially. Absolutely. I mean, they've moved to like seasons. You know, I mean, they very much push the like, we're moving this to kind of a, you know, we're not going to call it a subscription, but it's a subscription. You know, like that.

So, you know, that's how that works. All right. All right, all right, right, right, right, right. Well, this was a good stand-up. Thank you, everybody, for joining us for The Stand-Up. Thanks, Trash. Thanks, Guy. Yeah.

Nice track. Yeah, thanks for having me. By the way, Casey always denies when I say legendary game programmer Casey Muratory and then also casually drops, oh yeah, like Boulder Gates used one of my tools that I developed 20 years ago, not a big deal, whatever, not that it was legendary, legendary. Game developer. But there's no legend. But what's the legend? Somebody used a probably.

I would say there was a legend because you worked on Granny, didn't you? I did. Well, I wrote the entire thing. Okay. So I remember getting like game developer magazine, like in print copy. Okay, this was a long time ago. And you guys always had a full page. Yeah, that's true. I would say there's a little bit of legend.

I think I could go find one of those magazines. If you have a page in a printed magazine for game development, you are a legend of game development, all right? Oh, no, you know what I am? I'm notable, unlike Odin, because I have something in print, right? A print, like there was a print publication that has a mention of it. So all of a sudden, I can have a Wikipedia page. not Odin because it's not notable.

That's because Bill Linear doesn't know what he's doing, okay? Bill Linear, yes, Bill Linear. Thanks, GROC, for telling me all about Bill Linear. For those that don't know, Ginger Bill is in fact not named Bill Linear. No, he's not named Bill. But for whatever reason, Grok's like, Bill Linear and the O'S one-Moyal release. Yeah. And, of course, if you've watched the stand-up, then you know about Wikipedia claiming that Odin was not noteworthy

because it hadn't had anything in print. Yeah. All right, well, I'm going to leave you with this last chart by Microsoft. This is their co-pilot experience in Microsoft. So if you ever get confused which co-pilot you use, just reference this handy little chart right here. It's very useful, very understandable, very quick to kind of digest. I'm sorry, what is that prime?

It looks like an anus. No, well, if you look right here, this is the GitHub co-pilot CLI. You also have GitHub Copilot Pro Plus. You also have GitHub co-pilot spaces. You also have GitHub co-pilot. Here is the strategy. Big surprise, they're laying people off, right? Okay, like this is the, this reminds me that like army doc.

Do you remember when they had that, like when we invaded some country? I don't know. And then, you know, they were looking at that and they were just like. That really didn't narrow it down. Okay. Yeah. No, that really didn't narrow it down. But I remember there was like some like, some military top brass were like, I want to know how

complicated. It was, it was either Afghanistan or Iraq. And they were like, I need a PowerPoint that explains. to me how complicated it is. And they made the most ridiculous PowerPoint, like, slide you've ever seen showing all of the different components and how everything fit together. This is that slide. They're like, okay, we need to reorg. Yes. Anyway, so I think I understand how 14 levels of management ends up happening at a place like Microsoft. Whenever I see the co-pilot chart, I'm like, ah, this is what did it. All right. Well, thank you very much. Thank you everybody for joining us.

Please go check out all the co-host. We have trash dev, some coding guy, and C Muratori. known as Casey, Computer Enhance.com. Thank you, everybody, for joining us. All right, bye-bye.