#1313: Veteran Games Journalist Dean Takahashi on Mixed Reality, AI, Sci-Fi, Unity vs Unreal, and Meta Connect

I interviewed Dean Takahashi, Lead Writer at Games Beat and Venture Beat, at Meta Connect 2023. See more context in the rough transcript below.

This is a listener-supported podcast through the Voices of VR Patreon.

Music: Fatality

Rough Transcript

[00:00:05.452] Kent Bye: The Voices of VR Podcast. Hello, my name is Kent Bye, and welcome to the Voices of VR Podcast. It's a podcast that looks at the future of spatial computing. You can support the podcast at patreon.com slash voicesofvr. So this is number 8 of 12 of my coverage from MetaConnect. And today's episode is with Dean Takahashi. He's a lead writer at GamesBeat and VentureBeat, who's been writing about tech for 35 years and games for 27 years. So Dean is a veteran tech journalist, especially covering the GamesBeat. And I just wanted to sit down with him and get some of his take of what he's seeing here at MetaConnect, since he's a very prolific writer and has been really chronicling different aspects of the game industry. in a way that has been super detailed. He casts a wide net and writes lots of articles, but has an opportunity to connect to lots of different folks across the industry. And so he's more lately been covering a lot of things that are happening in AI, but also looking at the broader trends of gaming and also the influence of things like science fiction that are Feeding into the development of all these technologies So I'm gonna get some of his reflections of what was happening within the context of these latest announcements from meta both in the AI front But also in the context of augmented reality what he's seeing from augmented reality gaming and what gets him excited But also just these broader reflections on things like the different dynamics between unity and Unreal Engine engine over the years, their fight for different market share, how they're serving different audiences, as well as how they're both kind of struggling in terms of trying to figure out the best business models to be able to support their development of these game engines. So yeah, I think there's a lot of really great historical context that Dean has, and just really great to finally get a chance to sit down with him because A lot of different events that I go to, I always see Dean there. He's an intrepid shoe leather journalist who's going to all these different events and has been talking to lots of different folks and covering tech for over three decades and gaming for over 27 years now. So that's what we're covering on today's episode of the Voices of VR podcast. So this interview with Dean happened on Thursday, September 28th, 2023 at MetaConnect at Meta's headquarters in Menlo Park, California. So with that, let's go ahead and dive right in.

[00:02:17.879] Dean Takahashi: I'm Dean Takahashi, lead writer for GamesBeat and VentureBeat. I've been writing about tech for 35 years and writing about games for 27 years. The last 15 have been at VentureBeat, and I'm focused on game coverage for maybe 80% of my time, but then everything else tech kind of falls into the last 20% there, so.

[00:02:39.250] Kent Bye: Maybe you could give a bit more context as to your background and your journey into this space.

[00:02:43.213] Dean Takahashi: Yeah. I mean, I've always been a writer. I was an English major in college. I got a journalism grad degree. And then I trained during the summers with a program that trained minority journalists and put them into newspaper jobs. And so the newspaper industry became really fascinating to me, learning about it from people who were coming from different places like the New York Times. Washington Post and you know it kind of inspired me to get into what I thought was a very noble cause or noble business of recording the history of the world as it happens I guess. So that's what motivated me to get into it. And then over time, I think what sort of developed for me was this real interest in the intersections of these different industries, right? And so I covered semiconductor chips, which you could think of as really boring for Silicon Valley, but it's the silicon in Silicon Valley, and so that was a big business and industry to write about. But it gave, say, so much improvement and created the opportunity for the game industry to just continuously expand and get better and better, and get better and better graphics, better and better processors, and technology that just became more and more engrossing over time. And so the intersection of technology, games, and science fiction for me is sort of the most fun thing that I cover.

[00:04:08.292] Kent Bye: Nice. Well, I see you as certainly a veterans games journalist, but also probably one of the most prolific writers that I know. Sometimes you will publish anywhere from 20 to 30 to 40 articles. I don't know if in a day, but certainly over an event of all the different coverage. And so I also appreciated when I was reading Matthew Ball's book about the metaverse, how many of the articles that you had written that you recited in there. And it just made me really appreciate how much you've been really closely chronicling and documenting each of these, you know, like you said, the history as it unfolds and talking to these leaders like Tim Sweeney and different folks within the games industry. So, yeah, I'd love to hear any, like, reflections of, like, as VR has come on onto the scene and how you've seen it continue to develop and impact the broader games industry.

[00:04:53.283] Dean Takahashi: I remember in all places visiting Hong Kong way back in the 90s with family and coming across the Dacto Nightmare VR experience there in a shopping mall and playing it and then forgetting about it until Oculus came along, right? When people like Palmer Luckey were talking about, say, being inspired by Snow Crash, right? And, you know, I read Snow Crash when it came out in the 90s, and I would talk to people, and, like, it's interesting to see the, say, interaction or inspiration that happens between fiction and the real world. And so, like, Will Wright made a joke once about Snow Crash, and he said, A dog-eared copy of Snow Crash is the business plan for every startup in Silicon Valley, right? And so, when you see that kind of thing happening, and then decades later, Neil Stephenson comes into the technology business, the blockchain games and blockchain technology, and tries to create a business that will sort of represent the open side of the technology and open side of the metaverse, and trying to make the metaverse happen still. then real life and fiction, they blend to just an unbelievable degree.

[00:06:09.257] Kent Bye: Yeah, certainly there's been a long history of science fiction that has been directly inspiring a lot of these different technologies. And I know you've done interviews with Neil Stephenson and tracking those threads as well. But we're here right now at MetaConnect. It's the second day, and you've been here and doing your coverage. So I'd love to hear what some of your takeaways are as you've been here and connecting to both the developers and just witnessing what's happening with what Meta's doing their new platforms of mixed reality, artificial intelligence, and all the things that they're moving forward with smart glasses and everything else.

[00:06:42.152] Dean Takahashi: Yeah, I think it was inspiring to come here because you can see now that the technology is moving and it's moving faster. And things like Mixed Reality open up a new frontier for all kinds of applications and new kinds of games that we haven't had before. And so you can use these technological advances to deliver Experiences that we weren't expecting maybe or I wasn't expecting so much and so to actually play with the different Games and apps here. It's been fairly gratifying and fun because I was getting a little Worried that it was stalling like the metaverse isn't here yet you know I think you know Tim Sweeney was one of the people who sort of brought it back into my sort of I headspace when he was saying, yeah, you know, he was talking some years ago, maybe 2016 or 14 or so, about how the metaverse should happen in the next few years. And I was going like, how is that going to happen? That's like the Star Trek holodeck, right? Something I don't expect to ever see in my lifetime. And yet, you know, he and other people were gaining this confidence that Like Jensen Huang, the CEO of NVIDIA, he was also telling me that, you know, I am science fiction. I don't necessarily have to read science fiction because all of that stuff you're reading about, like the Metaverse, it is happening. And yet, while they have been, you know, sort of great advocates for the Metaverse, I'm impatient for it, and I haven't seen as much progress as I would like. And when I look at the Apple Vision Pro and see that it's going to cost $3,500, and they've been working on this for years, and they kind of show up without any real outstanding games or really cool applications, it makes me a little frustrated that this is taking too long. Because I want that $3,500 device to be about $300. And so if you project out with Moore's Law, which has definitely slowed down, it's gonna be 10 years before we get a $300 Apple Vision Pro. So I was feeling very frustrated, but coming here and seeing this $500 device, the MetaQuest 3 from Meta, it's good to see that kind of competition happening that's going to bring it faster.

[00:08:56.390] Kent Bye: Yeah, and I know in terms of mixed reality, there was the first encounters that they had, some portaling effects. Then there was the Stranger Things with some gesture effects, some portals with mixed reality. And there was also some multiplayer games. I'm not sure if you had a chance to play any of those. But I'd love to hear some of your reactions of what it felt like to play some of these different mixed reality game prototypes and demos.

[00:09:17.405] Dean Takahashi: I liked the different ones that I got to look at, like say the BAM multiplayer game, where you are playing with a tabletop experience and playing with things that look like toys, but in a digital contest where it's almost like a Smash Brothers game, right? And that has a lot of fun, you can You can have a good time with people around a table experiencing some very joyful gameplay. I think that what I look forward to with mixed reality is when you get away from the table, right? And then, like, if you were playing in your garage and there were a bunch of tanks moving around your garage and they're obscured by all the boxes you have there and then you have to have a tank fight with them. I think that kind of experience is what mixed reality is going to be able to deliver. And it's something that we haven't seen before and that turns your own home into an amusement park.

[00:10:10.901] Kent Bye: Yeah. And so as you're covering this space, when you do your articles, are you mostly looking at the news hooks and press releases? Or are you also looking at games and playing the games and talking about your experiences? Or what is the filter that makes you feel like something's ready to be written about?

[00:10:27.653] Dean Takahashi: I mean, I have a lower bar for news than many other publications do, and so that's why I'm writing a lot of stories. Like, I sometimes do write ten stories in a day, and you won't find people at the New York Times writing about games. you know, every couple of weeks maybe, right? And so, like, they're much more choosy about what they decide to write about. But I find that there's a lot of interesting interplay between making yourself accessible to people. Like, say, we try to cover all the games and game startups that get funded around the world, right? And so, that is one of the things that keeps us busy every day. And, you know, in my experience, that is how you get to cover and form relationships with the CEOs who ultimately run companies like NVIDIA and Epic Games and Zynga, right? And in each case, I covered those companies very early on. In fact, I wrote the very first story on NVIDIA. And it's now, like this week, I went to a Denny's where they celebrated the fact that Jensen Huang and his two co-founders created NVIDIA inside this Denny's restaurant here in San Jose. And now it's a trillion dollar company, right? And so I guess the insights then start coming from covering the same people who trust you over a longer period of time and getting into deeper conversations with them about the things they see. and seeing the patterns among all those things you write about. Like, you write about, say, one startup that's in mixed reality, and then the next week, you're writing another one, and then you're writing another one after that, and they're all getting funding. Then you realize, oh, this is like blockchain games. This is like AI in games, or whatever. It's VR in games all over again, where you see, like, maybe half of all of the venture capital in the space going into this brand new thing. And so that's where the patterns come in handy from having done this work that's more like in the trenches of just talking to a lot of people. I also like how you just get many different perspectives talking to all kinds of people from around the world.

[00:12:43.918] Kent Bye: Yeah, I guess I take a similar approach of the podcast. I'm having 1,305 podcast episodes, which is usually a lot higher than what most people listen to. It's like 2 and 1 half per week for the last nine years plus. But yeah, I totally understand the process of casting wide net, building those relationships. And there's GamesBeat and then VentureBeat. So VentureBeat is the idea that there is a broader looking at the funding of these companies and tech more at large. And then GamesBeat is a subsection of that that is also looking at gaming, but through the lens of the funding.

[00:13:30.567] Dean Takahashi: VentureBeat itself has also specialized more in recent years and had a lot of focus on AI. And so like our twin topics are kind of like gaming and AI. And it's interesting to see them impact each other or influence each other, especially now in the last year. And so generative AI is going to have a lasting impact on everything, including the game industry. And we have an opportunity to understand it better because we're covering both sides, I think.

[00:14:01.061] Kent Bye: I think the crypto hype cycle was there for a while as well, and I know you were following that closely. For me, I was always quite skeptical of where that was going to go, just from the experiential perspective. There wasn't anything that was happening, especially in the intersection of the crypto and the metaverse. There wasn't any kind of like XR. immersive virtual world experience that, for me, passed that quality bar. Maybe crypto voxels and some stuff in Decentraland, but there's not a real XR-first emphasis on that stuff. It's kind of more web-based. But I'd love to hear any reflections on whether or not you see it as an ephemeral hype cycle that has come and gone and maybe is waning, or if there's more of this integration of new, innovative business models that are still yet to be fully fleshed out with this intersection between crypto and gaming.

[00:14:46.242] Dean Takahashi: I mean, there is a criticism of crypto and blockchain games that I have no patience for, and that is, well, most of it is scams, most of it is dumb, most of it is never gonna produce anything, so I'm not gonna write about any of it, right? Well, that means you would never write about any new technology that came along because 95% of all the companies that get started fail, right? And it's only the handful of companies like, say, Intel, AMD, and NVIDIA in chips. that are the ones that survive and actually execute on all of the ideas and dreams that they had at the very beginning that were inspiring all those people. NVIDIA had to fight it out against 70 different graphics chip companies over time and that crucible made them better and they came out strong and There were many times when they were maybe 30 days from going out of business, as their CEO liked to say. If they went out of business, they would have appeared to be a scam, like most other things. So one of the things we try to do is follow the money and follow the people. And if the interesting people that we know start saying, I'm going to give this blockchain gaming thing a try, then that becomes more interesting for me to follow. And so I follow those people, say, more closely than I would follow some people who could very well be scammers. The interesting thing about interviewing crypto people is sometimes they won't tell you their last name, and they put an animated avatar up on the screen when you're doing a Zoom call with them. And you're going like, hmm. I don't know if I want to spend as much time with this person. So there's risks that you get caught, say, promoting companies that ultimately turned out to be faking everybody out. And so you do have to pay attention to what you're writing about and how often and who. You know, when the money goes in that direction and say like 50%, like in 2022, 50% of all money that went into game companies went into blockchain game companies. Then, you know, that's something worth following. People who had the same complaints, say, about all the free-to-play game companies more than a decade ago, going into PC games and also into mobile. And then, you know, a decade later, free-to-play is more than half of the gaming business, right? And so sometimes it works out, sometimes it doesn't. And yet, if you understand that there's a pattern here, and that you follow these companies to the logical extreme, you'll be following the right people over time.

[00:17:30.921] Kent Bye: Well, you said that you've been tracking AI. And there was certainly in the three pillars that Meta presented in their keynote, they had mixed reality, artificial intelligence, and smart glasses. And so I've just did a whole series of looking at some of the intersections of XR and AI and one of the companies that I came across at Augmented World Expo that I was really quite intrigued by was this company called in world that AI Which was used in both meat wall as well as Neil Stevenson has been working with them to start to create these bounded NPC characters that have large language model enabled conversational interface reception but are bounded by more of a knowledge and able to create this whole sci-fi and vibe that is going above and beyond what existing large language models can do. And so that, for me, is one of the more exciting innovations that I've seen so far in AI, but also generative AI and everything else. But I'd love to hear some of your take of what are some of the trends or things that you kind of get a sense that maybe there's something here that's a little bit more of just slapping in a large language model or kind of just throwing generative AI. If there's something more along the process of the production of the games something that's going to be a little bit more consumer-facing for end users that are going to be more directly engaging with different AI technologies. So love to hear some of your takes since you've been covering it here for the last bit.

[00:18:44.571] Dean Takahashi: Yeah, I think, you know, it is true that AI is coming into games and these large language models are going to enable characters in games that we've never had before, where the non-player characters, the NPCs, are going to be smart and you're going to be able to have real conversations with them. Like, normally in the past you might have three different things to say to them and they might have one particular thing they want to say to you. And then you go back to them the next time, and they just repeat it. And it just throws you out of the immersive experience to have that happen. And it's not fun. Nobody likes it. It wastes the player's time a whole lot. And so NPCs, while they bring something to the table, they also have been failing us for years. So when you come across an NPC that has a large language model behind it, and they're able to talk to you for a long time and have conversations and produce their responses in real time. It's a more satisfying experience. I think the worry I have is that at the moment, the large language miles can be very expensive to query, right? So if you say, can you tell me about the city here? And the NPC starts responding and tells you all about the history of the city. That's a very expensive transaction when it comes to computing time, right? The problem it creates is just tremendous demand from all of the players of the game constantly asking these questions of NPCs, which are fascinating to them now. They get stuck, you know, talking to them for an hour or so, and then the game developer winds up with a pretty large computing bill at the end of the day from Amazon or whoever is providing their computing. services to them. And if it's a dollar a day that you pay for a player for that computing time and they're playing 365 days a year, all of a sudden they run you up a bill of $365 for a game that maybe you sold for 70 bucks. There has to be a solution to that, and they are talking about these solutions now. Like, say, Roblox has talked about maybe dumbing down the large language models and limiting them in some way, using something like 16-bit floating point to do the computing instead of 64-bit. They're all coming up with different tricks now to reduce their dependence on supercomputers and making it more like, hey, the AI in your smartphone might be able to handle this. But there is something that I guess all of us maybe don't understand and that was like neural networks, large language models, they became magical at one point where they could take our natural language speech and we asked them a query and they produced the right answer for us. Like that's the magic of them. But, you know, we had to stuff them with like say a thousand images of a cat before they could recognize a cat. Whereas humans, they can look at a cat, you see it one time, The next time you see a cat, you know it's a cat, right? And so there's an inefficiency in the computing about it. And I think that we're going to get to a better place, I guess. We're also going to get to a place that is not, say, stealing copyrighted or trademarked information from the rest of the world in order to get you your answer, right? Or to get you your new creation when you say, create me a new pet in my game or something, right? And then, you know, you don't want it stolen from somebody else when it shows up. So there's lots of different interesting problems that they're working on, and I hope they're going to solve them and get us what we want.

[00:22:23.395] Kent Bye: Yeah, I had published that series on XR and AI and featured an interview with Keiichi Matsuda, who worked with Niantic on Meat Wall. And then there was also the nworld.ai, which was essentially creating these personas. And during the keynote here at Meta, they're essentially doing that same thing of creating these celebrity-inspired, bounded character personas of AI that you're able to engage with. And there was a bit of a surreal demo where Mark Zuckerberg's on stage. doing a text adventure with a virtual Snoop Dogg Dungeon Master who was charging forth and unsheathing his blade and these instructions that he's having this immersive gaming adventure and the context of a big tech keynote which again I feel like is this intersection between how already Meta is going down this spatial computing realm, but there is this inherent game-like interactive components that have been coming from the gaming industry that we're starting to see fused more and more into these mainstream tech products that are geared towards creating these types of immersive interactive experiences that are, like, say, prioritized across the family of different apps that Meta has across Instagram and Messenger and WhatsApp and Aspects of whatever they do with XR and the metaverse. So yeah, I'd love to hear any reflections as you've seen the technology cycles and the progression of technology in this intersection between the AI and the more gaming components as they move forward It reminds me of a quote that Seamus Blackley gave me a long time ago and he was one of the co-creators of the Xbox and he said

[00:23:54.905] Dean Takahashi: It's like that scene from Jurassic Park, life finds a way, right? And he said that whenever there's a new platform that gets created, games find their way onto it, right? And games pave the way for new technology to get accepted, right? And I think that's something that Mark Zuckerberg and Meta have realized and they're trying to push into the frontiers of mixed reality and VR and AR and the Metaverse and they realized that games are going to sort of be the tip of the spear for them and that they engage people in such ways that they enable some new product to take off and reach the masses and the millions. You know like by contrast Apple doesn't behave that way, right? They create platforms that are outstanding things for new technologies and consumers and accidentally the game companies find it, figure out how to use it, and get onto it. And it's a different approach, I think. between those two different extremes. One subsidizes the games so that they can do great things and attract the crowds on a platform, and the other ignores games and just makes technology for everybody, and the game people find a way to make use of it. I'm not sure which one is going to win, like, which approach. So far, Apple has gotten the biggest audiences for its products. But, you know, I still believe that in things like, say, the Metaverse, you know, like, different people have said that if you're going to build the Metaverse, you're probably going to use a game engine. and the people who know how to use game engines are the game developers, and that they're going to be the ones then that you need in order to build these sort of dreams of the future. And so, again, it's back to games lead the way, and I believe that makes a whole lot of sense, that we're going to get to the Star Trek holodeck through a game.

[00:25:56.576] Kent Bye: It reminds me of how Meta has also been actually investing and participating in different open standards like OpenXR as a part of the Kronos group as well as with Qualcomm which has been developing these different chips that are on to over 80 different platforms that are using the XR2 Gen 1 with the XR2 Gen 2 that was just announced but you know there's already like these 80 different platforms and so there's a bit of this cooperation and collaboration that I've seen from more of the Meta side Whereas Apple is extremely closed. They have a lot of proprietary stack. And they have things that seem to be almost antithetical to the way that game developers are developing. And from what I've heard from game developers, that whatever version of Unity they're going to have, it's going to be extremely limited for what you can and cannot use. And that's going to work. And so the production pipeline is potentially going to have to rip out everything and build it from scratch just to get it onto the platform. And it's a $3,500 platform. Does it even worth that effort to do that? So it feels like we're in this situation where it's also meta being open and leading with games and Apple being very antagonistic with the games, but also a fundamental difference between philosophy of openness of meta versus the closed approach of Apple. So not sure if you've also heard something similar from game developers who are potentially considering developing for the Apple Vision Pro or if you also had a chance to actually be there and try it out.

[00:27:14.950] Dean Takahashi: Yeah, no, I haven't actually tried the Apple vision Pro out yet. So I've been watching from afar I do think that whenever there's a dominant platform out there There's like an equal and opposite force that forms and so a counterforce will rise and develop on the open side whenever a closed system becomes dominant right and so like Apple has a shown that like with the iPhone and iOS they're very dominant and yet they inspired the creation of Android so that there was a more open solution to offset the opportunities that are closed out or lost because of the dominant platform. And I think that happens with things like games. It will happen with the open metaverse as well. And so I think There are lots of forces that are forming to advocate for the open metaverse and I think that's wise because people have watched this movie happen so many times already in the history of technology and if they succeed then there's sort of usually a chance for just much more opportunity to spread across the world and you get rid of some of the choke points or the bottlenecks that will make one company rich but stand in the way of progress in general. And so I'm hopeful that the technology companies can lead us very quickly into this space, like say, you know, create walled gardens that are successful and happen fast and don't get bogged down in a bunch of agreements with other companies I think they lead the way, but we can't have the world wind up in their hands altogether. And so over time, we'll get our metaverse standards and we'll get our open metaverse delivered ultimately. And it'll take time because everybody has to come to these agreements and figure out where the choke points are and get around them. Eventually, they become the force that can offset the wall of gardens.

[00:29:17.336] Kent Bye: Yeah, well speaking of the open versus closed approach we have Unity that had announced these runtime fees that had an incredible amount of backlash because they're retroactive and it's kind of a surprise Just destroying a lot of trust of a certain terms of agreements that you sign But then retroactively trying to change it and then folks both protest and react and they able to walk back different aspects of the retroactivity, but there's still like more of a product revenue share approach for companies that have over a million dollars or whatnot. So it's similar to something that Epic Games has been doing. But yet, even today, I just saw the news that Epic had laid off 1,000 people. So we have these big, closed-wall garden game engines with both Unity and Unreal Engine. that have really been quite dominant in all of gaming, seeing some flight into things like Godot or more excitement around more open pipelines from like WebXR and WebGPU and React Native approaches. So there's going to be like a whole open tech stack. But I'd love to get some of your take on this, because you're really at the heart of reporting on a lot of these games and what your kind of take on what seemed to be somewhat of a brand implosion and backlash that happened with that, but also what your hot take is in terms of what this may mean for the games industry.

[00:30:28.405] Dean Takahashi: I guess, you know, one of the interesting things about nature is, like, say the ants and the rats are still with us, right? And despite the fact that mammals came into the world and started dominating everything, the ants and the rats, they serve their purpose. And so, like, Epic Games has been around for decades. They create this great 3D game engine. But it was great for PCs and for game consoles, right? But it wasn't as good for mobile games when mobile games started taking off extremely fast. And so Unity came along and filled this hole with a game engine that was cheap and affordable to all those mobile game startups that were just barely getting off the ground. And they had the goal of democratizing game development. And they did that with their model. where you could use their engine to create cool mobile games, and they're like the ants and the rats coming up to bug Epic, which was more like one of the mammals, right? And so Unity has been eating up the market from the bottom, but it also did so by making a lot of things free. So like for developers, who were amateurs and just starting out, they got to use the Unity game engine for free. So more like a free-to-play model, and eventually, at some point, you graduate into professional and you have to pay. And that seemed like a good approach, like they got more than half the market of the mobile games market, Unity grabbed that, and Epic was slow to get it. And so now that mobile games are more than half the global games market, a decade after all this happened, Unity feels like it has an upper hand. But the business models of the two companies are so very different that Unity did not actually have the upper hand. They had this approach of grabbing market share, but having relatively thin and low profits. When they went public, Wall Street now was their ruler. And investors noticed that, hey, Unity, you're not as profitable as you could be. You're not as profitable as your rival. And what's going on here? What's wrong? And so Unity had to start thinking more about how to make money and how to be profitable while living up to their goal of democratizing game development. Epic makes a ton of money from making its own games, making Fortnite, right? And they subsidize the money-losing Unreal Engine now using all the profits that they get from Fortnite. And so that seemed like a, you know, extreme advantage that Epic developed in more recent years. to fend off Unity. And Unity now has been searching for ways to make profitable something that Epic loses money on and is happy to lose money on. So the competition between them is an unfair competition in that sense. So Unity, again, had to think about raising prices to not only avoid layoffs, but make making Wall Street happy now. And so, finally, they struck a nerve with the latest price increase that they had, and they have a full-blown revolt. They've lost a lot of trust of developers, as you said, and I don't know where this is going to end for Unity now, because they opened up Pandora's box. and those developers may become so sour that they will support something like an open 3D game engine now, or Godot, whatever alternatives become mature, especially in the open game engine space. Epic, meanwhile, though, as we noted, also isn't in the greatest shape, because Fortnite has now started to decline in popularity, and they're not making as much money from it. They're realizing that user-generated content is a trend they have to jump on, they're sharing more money with the creators of Fortnite Islands now than they were in the past and as a result their margins are lower for Fortnite itself. And so again, both companies now have problems and that's not good ultimately for game developers because they're not going to be able to invest as much as they used to in advancing the art of game development forward.

[00:34:44.362] Kent Bye: Yeah, that's a lot of really great context. Thanks for elaborating on that. It's been a big, hot topic over the last couple of weeks. And being here at MetaConnect, there is certainly a huge amount of different independent developers and developers that have funding. And so maybe you could share some of the different companies that you're interested in to cover and interview and talk about as you go back and start to write up and publish your coverage about the different folks that you've been able to connect with here.

[00:35:09.465] Dean Takahashi: Yeah, I've talked to a lot of, say, veterans in the space here, like, say, Resolution Games, Tommy Palm and his company. And, you know, they're crossing, I think, a couple hundred people. And so they're running companies now that are much more successful in the VR space than ever before. Companies like Shell Games are doing really well. And I think they're making it harder for people to say OVR has sort of been there done that because it's had its sort of hype stage and fall from that hype stage that it's not worth our attention or it's not worth investing in. That's actually not so true anymore as everything else has a hard time as well. And yeah, I do think that it's very important for meta to beseeding these companies with a lot of funding as well. It maybe isn't doing as much as it did in the very beginning in the past, but its support for these companies is still very important. You know, it's often the seed that helps the companies take off. I mean, like way back when Supercell, a mobile game company in Finland, got a loan from the Finnish government to get off the ground and start making their mobile games. and they eventually became a company that generates $1.5 billion a year in revenue. And they always remember who gave them the seed money for that. And in this case, they're happily paying $300 million a year in taxes to the Finnish government now. And I think that's the kind of economic miracle that can happen when you seed all of the companies in your space and help them take off and develop a real community and ecosystem.

[00:36:52.932] Kent Bye: Great. And finally, what do you think the ultimate potential of virtual reality, artificial intelligence, and the future of the metaverse, and spatial computing, and intersection with gaming, what all that might be and what it might be able to enable?

[00:37:07.608] Dean Takahashi: I think when everybody shares everything across everything else is when we get to a real metaverse. And then the consumers then go into these worlds and have seamless experiences. And you know, you can feel like you're in the Star Trek holodeck by snapping your fingers and changing worlds instantaneously from one thing to another with no delay. and bringing all your stuff with you. And I think that we have a lot of different things that are happening where one side of the world will benefit the other side of the world. And a perfect example of that is NVIDIA, as I mentioned before. It's a trillion-dollar company now. They're investing in supercomputers, making graphics chips for these supercomputers. They have a project called Earth2, where they're going to try to get all the supercomputers of the world together to simulate the world's climate, so they can understand climate change and make predictions about climate change for decades ahead of time. And if they can do this, you know, hey, they can save the world, right? But while they're doing this, they're going to create a simulation of the world. And I had a chance to ask Jensen, like, hey, if you do that, do you get the Metaverse for free? And he goes, yes. We're going to build Earth 2. And it's going to be the simulation. And it's going to be useful for all the scientists of the world. But, yeah, you know, hey, take it and go make the Metaverse from it, right? And so all the efforts that they're doing to invest in the Omniverse and the tools for making 3D objects interchangeable, things like Pixar's Universal Scene Description Standard, USD, that's enabling them to create this digital twin of the Earth. They're making digital twins of factories. They're going to be able to make cities. Hey, game developers love this stuff. They're going to want to have the most realistic cities possible. And so they're going to take a piece of it and use that as the starting point for building their experiences that may be more fanciful or, you know, crazy. And yet they're based on a foundation of things that have been already built by somebody else. And I think when we get to that kind of world where Rockstar Games can build out their version of New York and say to Ubisoft, hey, I want Paris from you. And Ubisoft has built Paris already and so they trade them with each other. And we get the benefit of that. We get great gaming experiences in worlds that are unimaginably cool.

[00:39:41.397] Kent Bye: Awesome. Well, is there anything else that's left unsaid that you'd like to say to the broader immersive and gaming community?

[00:39:46.659] Dean Takahashi: I'm looking forward to all of the changes that are going to come. And it's sort of much fun. It's been to see maybe three decades worth of advancement in this space. I feel like, yeah, we're just at the beginning of all the fun stuff.

[00:40:02.466] Kent Bye: Awesome. Well, Dean, you've certainly been one of the most prolific chroniclers of the gaming industry over the last 30 plus years now. And yeah, I always just appreciate your takes and all the different historical contexts you're able to provide throughout the course of this conversation and the coverage that you do there on both VentureBeat and GamesBeat. So yeah, thanks again for just taking the time and help recapping what you're seeing in the broader trends of the gaming and XR open metaverse industries. So thank you.

[00:40:27.703] Dean Takahashi: Thank you very much, Kent. I appreciate what you do as well. You get all the perspectives, all the different perspectives that people have in the world, and that's important.

[00:40:37.036] Kent Bye: Awesome. Thank you. So thanks again for tuning into one of my dozen episodes about MetaConnect. There's lots that I've been unpacking throughout the course of the series, and I'm going to invite folks over to patreon.com to be able to join in to support my work that I've been doing here as an independent journalist trying to sustain this work. Realistically, I need to be at around $4,000 a month to be at a level of financial stability. I'm at around 30% of that goal. So I'd love for folks to be able to join in, and I'm hoping to expand out different offerings and events over the next year, starting with more unpacking of my coverage from Venice Immersive, where I've just posted 34 different interviews from over 30 hours of coverage. And I've already given a talk this week unpacking a little bit more my ideas about experiential design and immersive storytelling. And yeah, I feel like there's a need for independent journalism and independent research and just the type of coverage that i'm able to do and if you're able to join in on the patreon five dollars a month it's a great level to be able to help support and sustain it but if you can afford more than 10 20 50 or even 100 a month are all great levels as well and will help me to continue to bring not only you this coverage but also the broader XR industry. I now have transcripts on all the different interviews on the podcast on Voices of VR and in the process of adding categories as well into 1,317 interviews now that have been published after this series has concluded. So yeah, join me over on Patreon and we can start to explore the many different potentialities of virtual and augmented and mixed reality at patreon.com slash Voices of VR. Thanks for listening.

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