00:00hi everyone welcome to day 6 and see
00:03podcast today's episode features Marc
00:05Andreessen interviewing Bobby Kotick CEO
00:08of fortune 500 company Activision
00:10Blizzard the largest game network in the
00:12world responsible for popular
00:14entertainment franchises such as Call of
00:15Duty candy crush and World of Warcraft
00:18the discussion originally took place at
00:21our most recent annual Innovation Summit
00:22and covers everything from the evolution
00:25of games in the 80s to the mergers and
00:27acquisitions that created the company he
00:29runs today to trends in gaming including
00:32touching on eSports you can also find
00:34other podcasts and videos from this
00:37event at a 6 and Z comm slash summit
00:40please note that the content here is for
00:42informational purposes only should not
00:44be taken as legal business tax or
00:46investment advice or be used to evaluate
00:49any investment or security for more
00:52details please also see a 6 + Z comm
00:54slash disclosures so Bobby it is really
00:56fun has a longtime videogame aficionado
00:58really fun to have the chance to talk to
01:00you today I would love to start with
01:02your origin story as they say in the
01:04superhero business so part of your
01:07urgent story if I recall correctly is
01:08that you started writing software for
01:09the Apple 2 while you were still in
01:11college so my college roommate and I
01:13started a company he worked at Apple
01:16computer in France he was French and his
01:19summer internship he was working for a
01:21guy called rolling Si and they had a
01:24prototype of the Lisa and Lisa was the
01:28Mac before the Mac it was the 10,000
01:30dollar version of the Mac so he saw this
01:32prototype of Alisa and thought for
01:35$10,000 would be too expensive to turn
01:38into a consumer product so he came back
01:40from his internship and said we should
01:43make Lisa like software and a mouse for
01:45the Apple 2 and we were in another sort
01:49of technology related business in our
01:51dorm room at the time but we thought we
01:53were making hardware I thought this
01:54would be a better business this make
01:56software and we really thought if Steve
01:58Jobs was gonna appropriate all the great
02:00technology from Xerox Palo Alto Research
02:02Center we should do the same to do it on
02:05a broader scale so we designed this man
02:08and word processor and a spreadsheet and
02:11a database all for the Apple 2 with a
02:14graphical user interface about a year
02:16before the Macintosh was released you
02:18also I believe credit if I'm correct
02:20Steve Jobs with convincing you to drop
02:22none of his credit but Steve Jobs heard
02:25about us cuz when you started in college
02:27I was in college I was making Apple to
02:29software and he heard about the software
02:31and he called me and said you know the
02:35lady said Steve Jobs calling it I was
02:36like ok it's one of the kids I grew up
02:39with from Roslyn Long Island and this is
02:41not even that good a joke and Steve was
02:44like super famous like cover of Time
02:45magazine yeah this is like 1983 late
02:491983 8383 super famous yeah and I'm like
02:53yeah alright whatever so I pick up the
02:55phone he's like hi I said hi he said the
02:57Steve Jobs I said yeah sure I'm thinking
03:00it's like I wanted to say like I'm Oscar
03:02Robertson I was a big Knicks fan and I
03:04thought like so he starts like telling
03:07me you need to come to Cupertino and I
03:10really want to talk to you about this
03:11Jane thing that you made and so I go and
03:13he shows his prototype of the Macintosh
03:16and like I'll never forget this mode he
03:19unzips this little blue bag from off of
03:21his table and he takes it out and he
03:22turns it on you see the hell out come up
03:24on the screen and I thought well this is
03:26on blue is gonna change computing and
03:28like I still get the goosebumps of just
03:30thinking about it and then he said can I
03:33and so like I had lugged this Apple to
03:37with like the 64 K floppy drive and this
03:40mouse that we designed that we put it on
03:42and I show him the mouse and he looks at
03:45it he's like this is a piece of [ __ ] and
03:46he throws it on the floor
03:49and he says you're gonna use our mouths
03:51and don't ever think of using a 2 button
03:53Mouse you're gonna use a one-button
03:54Mouse and I show it to them and the
03:56first thing he says is wait a second you
03:58select the text and then you select
04:00boldface I'm like yeah he's like no
04:02we're gonna think about verb noun versus
04:04noun verb and the way you actually
04:06boldface type and for 45 minutes we had
04:08this huge debate about how you boldface
04:10type and at the end of it he's like
04:13you're gonna make this for a new
04:14computer that we're gonna build call the
04:15Apple 2 GS and we're gonna tell you all
04:17about it but you're gonna make this
04:19software for the Appleton and we're
04:21gonna give you a contract
04:22excuse us the contract and then he comes
04:26to visit us in Ann Arbor Michigan in our
04:28office above a Burger King and the first
04:33thing he says is like how the hell do
04:35you work here like the smell of burgers
04:38comes off the elevator like it was cheap
04:42rent nobody else wanted a rent on top of
04:44a Burger King so at the end of the
04:47meeting he says if you have any
04:50vegetarian restaurants here that we go
04:51to for dinner and I said yeah I'm sure
04:55we do but I can't go to dinner I have a
04:58class he's what I mean I said I have a
05:01class he said in what I said it's a
05:03history of our makeup class he said what
05:05are you making up for I so I didn't go
05:08to the class he's like why do you need
05:10to go to this I said well I'm in college
05:12and he looks at me he's like what are
05:15you talking about you have a contract
05:18with Apple Computer and we have a
05:19deadline for the Apple teachers you
05:21can't be in college if employees you
05:22have to work full-time so get out of
05:24college and I said I can I promised my
05:28parents I would finish college he said
05:31no you're not finishing college I will
05:34rip and I can't say I will rip this
05:37effing contract up right now if you
05:40so I quit that's definitely the story I
05:45didn't tell them for about eight months
05:46is there I felt like all right I I
05:48needed to get more progress in the
05:50business before my father would say
05:51you're an idiot now you took money from
05:53this gambling guy and the loser
05:58basically goes so then fast forward a
06:01few years so 1990 you bought 25 percent
06:03stake and Activision became CEO in 1981
06:06so Activision people may not know the
06:07activision was a storied brand and video
06:09games Activision I believe hisses
06:11correct was the first third-party
06:12developer of video games in 1980 in 1980
06:14so it was a spinoff from Atari it's for
06:17the top people at Atari they got in
06:19conflict with management and there's a
06:20very big deal never won just because you
06:22know to quit certain a company's a big
06:24deal but also it's just a big deal
06:25because like literally there had not
06:26been a business of making video games
06:27for somebody else's platform as Tory
06:29made all the games for Atari tonight
06:31that's comfy Activision they had a run
06:32of hits I guess in the 80s early 80s you
06:34know they made a bunch of the top games
06:35for Atari systems and then they went
06:37bankrupt or they were about to go
06:38bankrupt there's a decade of pathetic
06:40performance and then finally live bank a
06:43whimper not a bang and so how did you
06:46get from building my senior above above
06:48the Burger King to buying Activision so
06:50in 1987 there were no real video game
06:54hardware companies and I played a lot of
06:57video games as a kid and I loved
06:59Activision games they made the original
07:02Atari 2600 games that made the company
07:04so successful with games like pitfall
07:06and river 8 and kaboom and these were
07:08just great games and so in 1987 I
07:11thought there's a great opportunity to
07:14make video game hardware and nobody is
07:17making video game hardware games were
07:19just played on personal computers
07:21Nintendo was just coming to the US so
07:24there was no dedicated video game
07:26well my best friend from growing up had
07:29just started a hedge fund with this guy
07:32from Texas named Richard rainwater and
07:34they were looking for investments and I
07:37went to him and I said I have this idea
07:39and in 1987 in October the market had
07:43like a 500-point mark crush was white
07:45Monday yeah black night when they you
07:47know the biggest crashes in the market
07:49history since the Great Depression and I
07:51had been working making software for
07:54among other companies Apple and
07:56Commodore and Commodore was this nine
07:59hundred million dollar revenues company
08:00at the time with 150 million dollar
08:04market value and so I went to my best
08:07friend and I said we should buy
08:08commodore they have this computer called
08:09the amiga and it has a keyboard and a
08:12disk drive but we should pull the
08:13keyboard in the disk drive out of it and
08:15it would be the first 16-bit video game
08:17system and it was designed by x Atari
08:20engineers and was made basically as a
08:23video game it was a bigger graphics
08:25performance at the time 68000
08:26microprocessor and dedicated graphics
08:28processors it was like a really
08:30innovative idea and my best friend at
08:34the time said yeah let's try and do this
08:36and so we tried and ultimately couldn't
08:40persuade the chairman of Commodore to do
08:43the deal but I just became then fixated
08:46with being in the video game business
08:48and my best friend at the time was Eddie
08:52Lampert who then went on instead of
08:54buying Commodore to buy Sears and Kmart
08:56and he was a customer for a little while
08:58we stopped extending credit to him I
09:00think four years ago though so I thought
09:04okay we have to be in the video game
09:05business and I had a little side
09:09business that was a licensing company we
09:11licensed characters so one of our
09:14licensing partners was Nintendo and we
09:18were licensing Nintendo characters for
09:21bedsheets and lunch boxes and I knew the
09:24Nintendo people and one day I was having
09:26a Nintendo meeting and they said have
09:29you ever thought about Activision and I
09:32said yeah I know the company well I
09:34played all the games and they said
09:35they're not in really good shape and
09:37they're about to lose a patent
09:38infringement judgment that will probably
09:40make them bankrupt so you should
09:42consider buying Activision so I bought a
09:4625% stake in Activision for four hundred
09:50and forty thousand dollars and I became
09:52the largest shareholder
09:54and it was insolvent but I tried to get
09:57the CEO on the phone to tell him I was
09:59his new largest public company of a
10:02market cap of 1.6 million dollars yeah
10:04well consider billion an a and
10:07infringement judgment that made it
10:09insolvent and so I couldn't here's this
10:12company that's doing horribly has all
10:14these great franchises and the CEO
10:16wouldn't return my phone call and so I
10:19kept calling him calling him finally I
10:20just thought I'll just go to the lobby
10:22of the building and tell him I'm there
10:24and see if he'll see me so I go and I'm
10:28waiting in the lobby and finally after
10:30three hours he says okay I'll come talk
10:33to you and I talked to him and I see
10:35that work your largest shareholder I
10:36have some really great ideas for you I
10:37have some game ideas I'd like to make
10:39and you know I love some of the old
10:41properties maybe we can figure out how
10:43to really get some of those properties
10:44back to being games and he's like well
10:47thank you very much for visiting and
10:48nice to meet you and I said no no I like
10:52the next meeting and he said there's not
10:56a next meeting but we're very happy to
10:58have you as shareholders and so I
11:01thought well how does that work I'm I
11:03own 25% of the company I'm like in the
11:07lobby and he didn't return my phone
11:10calls for a little while and then he
11:12agreed to have breakfast with me at this
11:14Consumer Electronics Show in Las Vegas
11:16obviously Activision was then you know
11:17tremendously successful you then did one
11:20other really really big deal that was
11:21transformative for the company which was
11:23and I don't quite know how to describe
11:24it but I think it's true of a merger
11:26with Vivendi games that resulted in
11:28Activision Blizzard because Vivendi
11:30owned Blizzard Blizzard obviously world
11:32of warcraft all these other amazing
11:33properties and then ultimately that
11:34partnership on Wow maybe you could tell
11:36us like that well it was a very very big
11:37deal for you at the time how did that
11:39deal come about so is the spring of 2008
11:42when I had a lot of anxiety about the
11:45public markets and big financial crisis
11:47is brewing yeah and you could see there
11:50was a lot of owl to the instability and
11:51we were nervous but we thought you know
11:54if we could buy something we're all
11:55right we had a big market value at the
11:57time and I thought we could buy
11:59something great that we really loved
12:01this would be a good time to do it and
12:03you guys weren't yet doing the massive
12:04multiplayer you guys weren't yet doing
12:06like there's this the big world Warcraft
12:08that point huge hit and we had explored
12:11doing a massively multiplayer persistent
12:13game there were a couple of other games
12:16before World of Warcraft that were
12:18massively multiplayer games but nothing
12:19that had had the success of Wow and we
12:23looked at if we even could figure out
12:25how to do it it would take us five six
12:28seven years and a billion dollars and
12:30the likely is we wouldn't do a good job
12:32fit but it was a and I knew the blizzard
12:35team because we had worked with them on
12:37there were a contract development
12:39company in the early 1990s and I knew
12:41the team very well and really liked them
12:44and I tried to recruit them out of the
12:46company and I knew that they had so much
12:49of a love and a passion for the company
12:50that no matter who owned it they
12:52probably wouldn't leave and I called the
12:55guys at Blizzard a bunch of times and so
12:57we should truly try and work this out
12:58and they were stuck as a division of
13:01Vivendi games which was owned by then
13:03you may describe what Vivendi was at
13:05this point there was a big mess and it
13:09was a former if I think it's correct
13:11there's a former public utility well it
13:13was the Water Company of France that
13:15this very nearby water and other things
13:18that flow through pipes yeah what are
13:19other things that flow through pipes it
13:21was a collection of more industrial
13:23businesses that the a man had taken it
13:27over and decided he was gonna become the
13:29media mogul of Earth and bought
13:31Universal Studios and anything he could
13:34actually buy he just bought and then it
13:37got disassembled because it was
13:38insolvent and they ended up with a
13:41couple of businesses the best one for
13:44them at the time was probably Universal
13:46music which I think Lusine is here
13:50so they had Universal music they owned
13:53Muraki Telecom up stake they owned SFR
13:56which is a French mobile company they
13:59don't count out police and somehow they
14:01managed as a part of a bunch of things
14:03to own this games business which
14:05included Blizzard and I asked them to
14:08sell us blizzard and we didn't have any
14:10interest than the rest of their games
14:12business but we wanted blizzard and they
14:14said no repeatedly and we offer
14:16four billion and then five billion and
14:19then six billion and then seven billion
14:20they kept saying no they like video
14:22games so we came up with this idea and
14:24we said how about this we'll stay a
14:26public company you sell us Blizzard or
14:29give us Blizzard and two billion of cash
14:32and we'll give you 51% of the company
14:34and my view was in 2008 even the biggest
14:38institutional investors no longer were
14:41really long-term holders and you know
14:44all the big institutional investors were
14:45trading in and out of the stocks like
14:47they were hedge funds so we could get
14:49Vivendi to own 51% of our company we got
14:53Blizzard as a partner we would have a
14:55great business and a stable shareholder
14:57who would never sell our stock and you
15:00know would be enthusiastic about
15:01investing at least what they told us
15:03investing with us for the future so we
15:06went back and forth for a long time
15:08finally negotiated a deal where they
15:10would do that deal and I almost blew the
15:13deal in the worst way - they had this
15:15beautiful headquarters in France like
15:18the nicest building in France and the
15:20guy who would put the original Vivendi
15:22together there were lots of these
15:23beautiful French offices that had part
15:26like gardens on their top of their roof
15:28he built a park and like mature trees in
15:32a row on the top of the Vivendi
15:34buildings like a park with trees you
15:37know we're all over the place in a one
15:38room was like a wine cellar and one room
15:41was this magnificent dining room and so
15:43we're standing on the top of this roof
15:45overlooking the Arc de Triomphe and the
15:47Eiffel Tower and the chairman of Vivendi
15:51says to me you know bubby this building
15:55it would be homes this will be your
15:56place you can't use your business in
15:58France and you should treat this
16:00building like your home you can do
16:01anything you want with this building but
16:03it will be a place for Paris you can
16:05make business here and you know it's the
16:07most beautiful building in Paris was the
16:09most beautiful view of view in Paris and
16:11it's for you you can do anything you
16:13want with it and I said anything is best
16:15anything and I said can I build 20
16:18storeys of condominiums
16:20and he turned white and I could see the
16:24like oh my god who are we getting in
16:25business with look he hadn't been
16:27briefed and I said no no sorry I'm just
16:31kidding we would only build ten stories
16:33but he still went through with the deal
16:35and so we had five wonderful years with
16:40them as our 51 percent shareholder until
16:43they were forced to sell our stake but
16:45it was the thing that actually allowed
16:47us to quit it's a big deal I mean it's
16:49really uncharacteristic for a company
16:50like this with a founder really of the
16:52modern business and then the CEO like
16:54you to be willing to sign over control
16:55right so that that story to me makes a
16:57lot of sense if you'd said 49 percent
16:58what was it about that deal that made
17:01you willing to do the 52 literally sign
17:03up because that was a pretty it worked
17:05out well but that was a pretty big risk
17:06at the time or not I didn't really think
17:09I was selling control okay I think I was
17:12telling 51% but I thought they really
17:15know nothing about video games what are
17:18they gonna do and I don't think they're
17:20gonna interfere all that much
17:22I was actually wrong they didn't really
17:24have you know there's like a corporate
17:25holding company so they were always
17:27trying to justify their value as a
17:29corporate holding company and you know
17:31we had like I remember the lúcia who's
17:34here will attest to this is exactly what
17:37happened but they said we're having a
17:39synergy meeting and all the business
17:41unit heads need to come together for the
17:43synergy meeting now they own a stake in
17:46maroc Telecom we didn't do business in
17:49Morocco they owned SFR the French
17:52telephone company and mobile games
17:54wasn't really a thing at that time they
17:56own can help loose so a French TV
17:59network we didn't really have any
18:01applicability and universal music where
18:03we did license the music for Guitar Hero
18:05but other than that we had no
18:06relationship and a broadband company in
18:09Brazil so we all get together have this
18:10big synergy meeting and then we had to
18:12go around the room and say the synergies
18:14that we identified between each other
18:17and they got to me and I said that maroc
18:21Telecom we went to their cafeteria and
18:23and they have tagine and we got the
18:28tagine recipe for our cafeteria which I
18:37thought was a great synergy because I
18:38liked I gene but it wasn't really that
18:41much yeah yeah yeah so then they had to
18:45sell us back their steak completely on
18:48why didn't ultimately on I guess I'm a
18:50completely unwound in their own way so
18:51and everybody everybody well so it
18:54turned out so give us a kind of a state
18:56of the video games industry today
18:57gigantic global phenomenon lots and lots
19:00of change in flux lots of potential
19:01controversy so I would say of the 28
19:05years I've been doing activision 30 some
19:08odd years I've been doing software I
19:10have never seen more opportunities than
19:13exists today markets that are opening
19:15and you think just ten years ago if you
19:18wanted to play video games you either
19:20needed a thousand dollar PC or a three
19:22or four hundred dollar video game
19:24console there really weren't any other
19:25ways to play video games but phones have
19:29ushered in this whole new opportunity
19:30like for years for most of the tenure
19:34that I've had as CEO we sold in
19:36developed countries to middle class
19:38consumers on expensive devices today we
19:43sell in 196 countries around the world
19:45we have 400 million customers and anyone
19:49in any socio-economic strata can
19:51actually play games I think that was the
19:56biggest shift that took place is now you
19:57truly have a global market the second
20:00thing that then happened is when you
20:02started to see the games become more
20:05social experiences like he's a headset I
20:08can talk to the person I'm playing with
20:10I can play with somebody from anywhere
20:12around the world the introduction of the
20:14social experience was the true
20:16transformation to me of the opportunity
20:19and so where you look out in the world
20:21today you have a global audience you
20:23have this ability to create this true
20:25social experience and I remember years
20:30and I'll paraphrase but Mandela had this
20:32definition of sport that it was the
20:34great equalizer and it was this thing
20:36that allowed you to actually break
20:38racial barriers or religious barriers
20:40and economic barriers in order to foster
20:43competition and that the great
20:45competitors in sport could come from
20:47anywhere and everybody felt this ability
20:49to have a sense of belonging and purpose
20:52and meaning and that is what video games
20:55has become for so many people and it's
20:58hard to illustrate this for some people
21:00but I was at a panel not long ago with
21:03Alex Rodriguez who actually owns one of
21:05our overwatch team franchises and Roger
21:08Goodell who is the NFL Commissioner and
21:10the moderator said our eSports sports
21:14and I said the same characteristics that
21:18Mandela described what makes sport great
21:21is what makes eSports so compelling and
21:23engaging and I said to Alex stand up and
21:27Alex stood up and I said look at you how
21:31many people in the world can play
21:33professional baseball and he said well
21:36there are roughly 1200 professional
21:37baseball players in the major league
21:39baseball and about 3,000 capable of
21:41playing major league baseball and I said
21:45look at this guy like this is like the
21:48most fit athletic specimen of a human on
21:52the earth and there are only 3000 of
21:54those people who can do what he does
21:56video games is the only competitive
21:59medium that is going to give me that
22:00experience and that purpose and that
22:02sense of belonging in that camaraderie
22:04that you got from sport and so of course
22:06it's gonna be as popular sport if not
22:09more popular than sport and that I think
22:11more than anything is now what we see is
22:13driving consumption and engagement and
22:16interest and passion and we're just
22:19scratching the surface of opportunity
22:20right so I think you know people have
22:22obviously had a lot of great experiences
22:24in a great faith in the video game
22:25industry for many years based on the
22:26idea that everybody can participate this
22:29idea that people are gonna voluntarily
22:30watch other people playing video games
22:33is a new idea and obviously it's
22:35becoming a twitch and Kev feat one of
22:36our companies and so forth like it's
22:37it's this is gonna be a already is a
22:39very big phenomenon it's a key part of
22:40eSports it's you know the ability to
22:42fill an arena with people watching other
22:43people play video game
22:44like that a few years ago that just
22:46sounded wildly implausible what was the
22:48point like when did you figure that out
22:49well I think probably when we launched I
22:52didn't own Blizzard at the time but when
22:54StarCraft launched this was a game that
22:57in Korea I think at the height of its
22:59popularity R so I don't know the exact
23:01number but I think it isn't more than a
23:04decade ago but the height of its
23:06popularity in Korea Starcraft had 5
23:08million registered players now this is a
23:10country of 60 million people the game is
23:14primarily of male game experience and so
23:17you think about 20% of the population
23:19actually of the male population played
23:21or was a registered player of StarCraft
23:24and we saw arenas getting filled with
23:26spectators there were three dedicated
23:28cable channels in South Korea that just
23:31broadcast Starcraft competition there
23:33were sponsors or professional players
23:35making $100,000 or more so this is an
23:38amazing phenomena that took place that
23:39we looked at as purely marketing you
23:42know the people are enthusiastic we saw
23:44the box there was nothing more to it
23:46than that and we managed to do every
23:49single thing wrong in commercializing
23:51the eSport of StarCraft but it was the
23:55first time where I had really thought
23:56you know there's something that could
23:59even be bigger than the games themselves
24:00that would relate to the spectator
24:03experience now even with games like
24:07overwatch which is probably our most
24:08successful eSport initiative it's more
24:12like golf so if you're a spectator of
24:15overwatch it's likely you're a player of
24:17overwatch for tonight I think was the
24:19first game where people would spectate
24:22and it would actually be a catalyst for
24:25them to play and so I think what's
24:28happened is it's more of a social
24:29experience in a lot of respects than it
24:31is just a game but I think that what
24:34you're now starting to see is that your
24:36games have so infiltrated the popular
24:38culture of the world that it's exciting
24:40for people to watch their heroes who
24:43compete against each other it's in the
24:44same way a sport right so many of the
24:47most successful games that people watch
24:48or that are now actually formerly sports
24:51correct me if I'm wrong they were not
24:52originally designed for this pair they
24:53were designed to be game so people just
24:55played and they've been kind of
24:56repurposed into this kind of
24:58broader public phenomenon maybe that's
24:59simply untrue but I guess my question is
25:01kind of how will videogames be designed
25:03going forward for eSports and for people
25:06watching it in addition to playing that
25:08is different than how video games have
25:09been designed up to this point yeah
25:10that's a great question so a lot of the
25:12games today were not specifically
25:14designed for spectating which is why you
25:16end up with that phenomenon of the
25:19players are the spectators in order to
25:22have a more broad appeal spectator
25:26experience the games need to be designed
25:29in a way that you actually want to watch
25:30them whether you do or don't play them
25:33and I would say that the overwatch team
25:35spent a lot of time early on trying to
25:38construct the game from the ground up
25:39that would be a fun spectator experience
25:42but I think what you will see is that
25:44people are now paying more attention to
25:47in game design the idea that the games
25:50may be spectated by people who aren't
25:52players I don't think any time soon
25:54that's gonna be the primary
25:55consideration will still be principally
25:58focused on gameplay but things like
26:00camera angles and commentating and you
26:04know making sure like you know when we
26:06organise the overwatch league one of the
26:08organizing principles was the reason why
26:11sports are so successful is tribalism
26:13and that having a local affiliation was
26:16so crucial to the success of sport
26:18whether it's a country affiliation or
26:20city affiliation so we created a
26:22structure that allowed for 28
26:24independent cities to field teams and I
26:27think that as you start to take those
26:29considerations into play when you're
26:32thinking about the design of the games
26:33or the leagues or the competitive
26:35experience that they will have more of
26:37the characteristics of traditional sport
26:39right would you venture a guess as to
26:41when video games will be in the Olympics
26:44which is a logical implication of what
26:46we're discussing right I don't think so
26:47I actually don't think like the Olympics
26:50has never been about a commercial
26:52enterprise and so if you think of it
26:54well analog right there's not like if
26:57you had to pick a game you're now
26:59endorsing someone's commercial
27:01enterprise you know there's not any they
27:06today and so I don't know that you could
27:10see the logical jump to the Olympics
27:12okay the video game industry seems to
27:15have a particularly cute version of a
27:16dynamic that you see with you know let's
27:19just say consumer properties that aspire
27:20an avid fandom so it's a enthusiastic
27:23early adopters right and so you see this
27:24with movies you see this with TV shows
27:26you see this with basically think you
27:27know things that really bucket by the
27:28popular imagination you you know for
27:30sure see it with video games so you've
27:31got this kind of leading-edge might say
27:33early adopter / super enthusiastic user
27:37base and they start to develop opinions
27:39and they start to develop opinions that
27:41maybe the people who make the games
27:42aren't quite doing what they want and
27:44then when things you know really go
27:45sideways there can be you know protests
27:47and boycotts and all kinds of like but
27:48you even end up with the inmates running
27:50the asylum or at least looking like
27:51they're certainly trying to how do you
27:53thread the needle is somebody who make
27:54anniversary's letters how do you how do
27:56you thread the needle for the early
27:57adopter base as opposed to the
27:58mainstream and how much do you early
28:00adapter base and asset how much does it
28:01really adapter base a challenge a
28:03so I think that the difference between
28:05film or television you know a great film
28:09you're gonna spend two hours of your
28:11life watching you know great TV shows
28:15gonna be 13 episodes or 22 episodes the
28:17season yeah that's me 13 or 22 hours a
28:21game hour average duration of gameplay
28:25that includes games like candy crush is
28:27an hour per person per day games like
28:30Call of Duty or World of Warcraft are
28:31hours a day so the interest and the
28:36engagement and the commitment that
28:38you're making to that form of media is
28:40so different than film and television in
28:43my view you have the right to have a
28:47strong opinion and voice your opinion in
28:51exchange for making that our Plus
28:54commitment a day which becomes more of a
28:55lifestyle and so instead of you know I
28:58think some companies run and hide and
29:01don't really engage their user base but
29:03I think we have users and players who an
29:06audience members will tell you and give
29:09you really good insight into how you can
29:12modify an adapt your game so you listen
29:14to them right and they're not always
29:16right but oftentimes
29:18they're pretty and especially when you
29:20hear the sort of the mass view they're
29:24pretty right the beauty of our business
29:26though is that if you can get out in
29:28front of it early let people actually
29:29have an experience with the game get the
29:32feedback and you're willing to take that
29:33feedback and enhance improve and modify
29:35the games it's a great roadmap for
29:38innovation so I'd like to ask you about
29:40two games that I think are arguably you
29:42know transformative from a conceptual
29:43standpoint for gaming and you tell me
29:45what you think or maybe describe that
29:46what do you think are the structural
29:47significance of each of these and so the
29:49first is fortnight and you alluded to
29:51one of the Romantics changes maybe
29:52describe like what is the significance
29:53of fortnight to the industry so for
29:55starters there's this perception that
29:57fortnight is an overnight success it's
30:00not epic the company that made it has
30:02been in the video game tim has been in
30:04the games business almost as long as I
30:05have been and they are excellent at
30:08making games and what they did was to
30:12really spend the time in a very focused
30:14determined way in taking the Unreal
30:16Engine and turning it into something
30:18that was gonna be a broad appeal very
30:20compelling social experience and I think
30:22the aspiration was build the social
30:24network that's anchored in a game
30:26conceit and they made it cross-platform
30:30in its playability they made it very
30:33accessible they changed the way that
30:35they deliver content to seasons so move
30:39from the future film model to the
30:40serialized television model and it's
30:43really fun and they managed to do what
30:47you probably can't do intentionally but
30:49capture the popular cultural zeitgeist
30:52and the other thing is that it doesn't
30:54require you to make a two hour a day
30:57investment you know you can have a 20
30:59minute experience that is really
31:01satisfying but this is not accidental
31:03you know these guys have been doing is
31:05for a very long time and I think what it
31:07has started to do is broaden the appeal
31:09of games to people who might never have
31:13played games before and then what is the
31:15significance of Pokemon go and by the
31:16way for people who don't actually just
31:18saw this yesterday Pokemon go
31:19third-party report but the report was
31:20revenue last month was still in the
31:22order of 75 million dollars so it's
31:24still something like a billion dollar a
31:26year revenue business today and this is
31:28where the game is now what two years old
31:30or something like that analyst
31:31at least rumor has that you know they
31:32have new stuff coming but it's been a
31:34giant yet again it's like where's the
31:36innovation there but it's like you know
31:38and Nintendo is really great at
31:40innovations that are very physical in
31:43their nature so the we like that moment
31:46I was describing to you about the
31:47Macintosh when I first saw the prototype
31:50of the Wii it was like that equivalent
31:52goose bump moment I was in Kyoto and I
31:56went into his room and there was a TV
31:58and it wasn't looking LED it was an
32:00actual tube TV and there was a pond that
32:05was on the screen a little cartoon pond
32:07with little bubbles popping up from
32:09every once in a while and the head of a
32:12Nintendo at the time was a guy named
32:13Aguada son and he gave me the controller
32:15and I held the controller I just started
32:18going like this and all of a sudden you
32:19could feel the tension of the controller
32:21and the motion control of the controller
32:24and I started to like fish around and I
32:27grabbed a fish and I pulled the fish out
32:29and I thought the video games will be
32:32completely transformed that nothing had
32:34really taken the physical experience in
32:38video games to that level and I think
32:41that what Pokemon go did is something
32:43very similar but it created this
32:45physical experience that was I think it
32:48was the first time a R had been executed
32:51on a broad scale and so I haven't seen
32:54anything gaming that we tell you has
32:57really captured the imagination of
32:59people on a broad scale using a R
33:02besides Pokemon go but I would say when
33:05you look at where some of the next big
33:07innovations in gaming including what
33:08we're working on AR is gonna have more
33:11near term impact than VR amazing okay
33:14good and then final closing question
33:16what's the one Activision game that has
33:18come out this year that people really
33:19have to play and then I know it may pain
33:21you but I'm gonna ask you what's the
33:23best non Activision game that has come
33:25out this year but people really have to
33:26play so I would say call of duty black
33:29house for which we just released the
33:31blackout mode of call of duty black ops
33:324 it is so incredibly fun to play what
33:36is that what is that thing what does
33:37that mode it's like a pug dream it's a
33:39battle royale battle
33:40and it's super fun to play and you can
33:43do it in like small 25 minute increments
33:46but very accessible very fun to play
33:48I haven't played Red Dead Redemption yet
33:51but I want to and I would say of the
33:53things that have come out this year I
33:55think it look like westerns are very
33:58hard to do because they're very American
34:00in their field but the game looks
34:02fantastic and everybody they knows
34:04played it has that a lot of fun playing
34:06yeah fantastic and I think we have party
34:07favors new book called duty for every
34:09call of duty so I believe everybody's
34:10gonna have a copy of Call of Duty Bobby
34:12thank you so much Marc thank you very
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