After a volatile few months across games, tech, and public markets, it’s time for a grounded check-in on where the industry actually stands. Host Devin Becker is joined by Aaron Bush (Managing Partner & Co-Founder, Naavik) to unpack the latest signals – from AAA publisher performance and what recent EA earnings suggest for big franchises like Battlefield, to Ubisoft’s ongoing restructuring, studio closures, and the push to reframe its future through initiatives like Vantage Studios.
Next, they dig into Roblox’s continued growth and what its recent results imply, even as age-related scrutiny and safety conversations remain part of the narrative.
From there, the discussion widens to the state of the console market: the early momentum around Switch 2 sales, the trajectory of Xbox hardware, and why Sony appears to be holding its ground.
Devin and Aaron also look at how transmedia is shaping perception and demand, including Nintendo’s recent moves and what releases like an upcoming Mario Galaxy movie – and the surprise success of Iron Lung this month – reveal about IP leverage, audience crossover, and timing.
They close with addressing the market whiplash around the reveal of Google DeepMind’s Genie 3, and a “buy, sell, or hold” round covering Microsoft, Krafton, AAA vs. AA, and PC gaming to highlight where near-term opportunities and risks may be emerging.
We’d like to thank Heroic Labs for making this episode possible! Thousands of studios have trusted Heroic Labs to help them focus on their games and not worry about gametech or scaling for success. To learn more and reach out, visit https://heroiclabs.com/?utm_source=Naavik&utm_medium=CPC&utm_campaign=Podcast
This transcript is machine-generated, and we apologize for any errors.
Devin: Hello everyone. I'm your host, Devin Becker, and today I'm delighted to be joined by Aaron Bush, who’s a familiar face you may know from both being on the interview side as well as on the interviewee side here. He's a managing partner and co-founder at Naavik. And today we're gonna discuss something we don't get a chance to do very often we've done just once before, which is to check in on the overall game market and some topics just across the broader game industry, dive into some different areas and just see what's going on besides just the individual news hits.
So, Aaron, though, why don't we start off with what's going on in Naavik?
Aaron: Yeah., Well, yeah, happy to, to be here. Always wanted to just chat about what's going on. But yeah, I mean, Naavik’s business as usual, where our consulting team is just helping a bunch of companies around the industry. One of the, the newer things that we're ramping up. By the time that this episode goes live, we'll have published the, our like new second cohort of our fractional talent team. And so, we've been building out our, you know, our team of people that can basically like plug in across like any part-time role that any game team would want.
And so, from anything from analytics to game design to narrative, to QA, to you name it, where we've built out a pretty robust team that can, can plug in. So, so yeah, I mean, if anyone who’s listening at any point needs some part-time fractional support for what you're, for what you're making, there's a good chance that that Naavik has a great person for you. So, so just let us know. But otherwise, largely been business as usual.
Devin: Well, that's a good thing though. Definitely, 'cause business as usual is usually very busy with Naavik, so definitely, definitely good to hear. Well, why don't we just start by going through a few different high level topics. Some things that, some, some stuff has had news articles, some stuff is just kind of broader. But stuff that I think is still worth paying attention to, especially as we're kind of like in the bit of the earnings season of some, some extent, right? Like, which is always our favorite time to discuss this stuff because it's when there's actual numbers for people to talk about and like people present at least their best face about what's happening.
So, let's start with like the AAA companies. There's a couple of AAAs that are, that are doing good and not doing so good. I think EA is one that's on top of mind with some good news recently.
Aaron: Yeah, I mean it's, it's, it's interesting because obviously Battlefield Six has been awesome. It's, you know, we were pretty early to predicting that it would outcompete Call of Duty this year. And you know, that's been a very successful prediction. And of course, you know, like being able to rejuvenate a mega franchise like this is, is a big deal for any publisher even, you know, one of the biggest in the world like EA, and that shows in the results of course, like, you know, it's pretty tragic that Vince Ella, passed, the timing, passed away.
Devin: Yeah,
Aaron: And you know, that puts, you know, some, probably some questions on, you know, like where Battlefield goes from here. But, uh, in general, the team should be like really proud of what they've done. Saudi Arabia should be really happy that, that, that Battlefield Six is, is doing well too. It's kind of funny because, you know, there are only so many of these mega public companies in the games industry, and generally when one of them, like EA, reports, LinkedIn and newsletters are flooded with all of the takes, but because the, you know, they're getting acquired and the price is set. And that's not really changing. It kind of doesn't matter, you know, in terms of understanding like where this will go for, you know, the business and the stock when, you know, it's not really like for the public anymore. And so the conversation there is gonna change. At least we still get to see some of the, the data there, which will go away later this year.
As you know, more of these companies are just, you know, getting consolidated or getting off the market, which, you know, I don't love from a, from a public market lens. But, but yeah, I mean, hard to, to criticize where they're at right now.
Devin: Yeah, I mean it's, it's tricky too, 'cause like even if they just get like acquired by a bigger public company, you don't always get the details anymore because like, it's like you take, you know, Microsoft for example, you don't always get all the nitty gritty details about all the studios they've acquired.
I'm sure they're not reporting a lot of happy details around Call of Duty, as you mentioned for Activision Blizzard King within Microsoft.
Aaron: Not this year.
Devin: It's, it's tricky, but I mean, we'll take the good news from EA while we got it. Like I'm sure, you know, with plenty of layoffs and stuff like that, them kind of relying on sports franchises is good to know that, that the, the military sports, so to speak isn't completely dead over there.
That there's still some of their original IP outside of sports franchises that will continue hopefully more than that. I, I know some people are a little like hesitant, like, going to this deal. Is it going to mean expansion or contraction? And I think generally with acquisitions, we know it probably means more likely contraction to an extent before any kind of expansion, but maybe.
Aaron: Yeah, I guess we, I guess we haven't really talked about this on the podcast too much. I mean, my take is that like, this isn't really a normal private equity deal. Right? Right. Like if this were just private equity companies, like EA is not the type of business that you go after because it's, it's a good business.
Like it doesn't need to be turned around. Right. And, and even in this case where private equity is involved to some extent, even though it might even just be more of a stamp of an approval for, you know, it's mostly Saudi money going into the, the deal. It's not really a business that they're need to or like are trying to turn around.
Like maybe they'll continue to be some, you know, cost conscious efforts. Although I doubt that even is going to be like a major thing that happens here. And if anything, it's, you know, where we might see the most action is just how Saudi Arabia views EA and its broader portfolio of—
Devin: Right.
Aaron: Sports and gaming assets where EA kind of fits at the intersection of that with a lot of video game like sports games. And so, you know, are there gonna be more crossovers with like, the leagues that they own and like, you know, pushing more types of like, can you watch sports or like get more involved?
Devin: Yeah.
Aaron: With like, what's happening in the real world in FIFA or, or in FC. I mean, and so I dunno, that's where I think we'll see the most impacts. And I don't think it'll be like that.
Devin: Yeah.
Aaron: Dramatic of like a business catalyst for, for EA. But maybe on the Saudi ecosystem side, they'll start tying things together in more interesting ways.
Devin: Who knows? Given their interest in eSports, maybe we'll see a push again for Battle, Battlefield eSports. Like there's been attempts in the past. They never really worked out that great, given the nature of the games. A little knot, eSportsish, but you never know, like I never thought PubG would be an eSport. Right. World. Just because a game, east World Cup 20
Aaron: 26, 20 27, maybe we'll be there.
Devin: Absolutely. And Olympics trying to make a push as well.
Like, so you never know. Like we, we could definitely see a push in that direction because that money is flowing in that direction. But speaking of, of a company that maybe not as rosy of an outlook and something that I know is one of your favorite companies to talk about, I think Oh, yes. Ubisoft. If it could even be called Ubisoft at this point, hard to even say what to call it now because it's turning into this weird kind of beast with Vantage Studios and the other unnamed spawns from that.
Aaron: Yeah. What a mess. Right? Yeah, I don't think we need to rehash all of the, all of generally the negativity that we've, you know, analyzed about Ubisoft in the newsletter and podcast extensively over the past few years. The, the crazy part is just that, like the saga continues with no end in sight.
And, you know, I would've thought that maybe by this point they could have found their, their footing somewhere. But that has not been the case at all. And what's the weirdest to me about, or the craziest to me about this, the latest aspects of this saga is that like, yeah, the management decided to shut down, you know, a bunch of projects.
Like they need to streamline, you know, what they're working on. Like, fine, like, makes sense. But the, the outcry from employees about what these changes are, right. It just rings completely like tone deaf to me, where like we see unions coming out, like basically like pitching and complaining super hard.
That like returning to the office and like greater capacity. It, you know, like is completely unjustified and against the rights of like being an employee at, at Ubisoft. And it's like, what, like where has the world come to, or like this culture come to where like that becomes a more prominent like take, and you know, a lot of the employees are asking for management to be held accountable to a lot of the clearly bad decisions and bad management that has taken place over the past many years and it's fair.
But at the same time, like. It's sad, but like the best decision Ubisoft could have made to rightsize his business is by like cutting its employee count in half. Yeah. Because the, the revenue per employee and just the bloat of that business is the, the revenue employee is, you know, so much lower than every other leading publisher.
And it has, you know, generally gotten worse. And the bloat there, you know, there've been slight changes. They've cut, you know, had some layoff rounds around the world. But even so, like, it hasn't made like too huge of a dent, especially in, in France, which is where a lot of these unions and the outcry are coming from.
And so, yeah, on both sides I'm just like, man, like yeah. It doesn't make any sense what people think is the right thing to, to do here. Right. And it's sad, but yeah, I still don't see like an end to the. To the chaos here. Like this could still be a business that we're like, what in the world is going on for now?
Devin: That's what's your favorite business to talk about? Because it's just a never ending source of interesting choices. And I use interesting and, and not necessarily the nicest way, but they, I mean, I'm, I'm a fan of the company and in some ways, but I just watching that sort of trajectory. But like, it, it, the one thing you point out that I think is relevant to a lot of these layoffs in general is just COVID, uh, trajectory in general.
Like everyone overhired during COVID, all this stuff happened. The work from home stuff, like, we're still correcting from COVID basically in the entire industry and it BiSoft maybe even more than others with having to, like, I, they obviously had so much middle management in that company. Like the stories I heard of like people having to get like 25 managers to sign off on one decision just to try and even do something towards live ops is just, I mean, we don't know if that that'll be fixed, right with the, the creative houses and stuff, but it does sound like that might be a better way to go is to have a little more independence, a little less, you know, Paris managing everything from on high with every studio tied, but they also like closed those studios.
That kind of surprised me. So like the union thing with Halifax, where it was like they, they had the uni thing, like what was it like just right before and then the shutdown right after, and I don't know how much other studios were involved, but I know they were doing quite a bit on Division Mobile and that was looking really good.
So, I don't know what the fate of that one is now, 'cause it wasn't announced as canceled or not.
Aaron: Yeah, I don't know. I've always been a little skeptical of their mobile efforts, but, uh, yeah, I mean, even Vantage Studios is still like headquartered out of France, and so I doubt the, and you know, the, it's more like a, just carving different lines of control between the same people as I read it. So, I don't think anything much has changed other than just the structure of, you know, putting your best assets in one subsidiary type of business that Tencent can, you know, take more advantage of. I don't think 10 cents investments to do be soft have been very good.
Maybe that will, you know, turn around at some point if they can find an, an advantageous way to, you know, take over some of these leading franchises. But yeah, I, there's always something to talk about here, but I do wish the saga would turn more positive and it's completely self-inflicted.
Devin: Well, hopefully that's like a, a mortal wound to the parts of, they're self-inflicting it on, so they can be double that.
But I am interested to see, like, for, I don't think a lot of people realize this. I happen to notice it, so I pay attention to the game in particular. But Rainbow Six Mobile is scheduled to go global on the 23rd this month. And that is when I think might be 10 cents involved. Not entirely sure, but that, that seems to be something they're pushing for.
And I mean, I, it could go either way. I've played it a few times. It's, it's interesting, it's fun, but it's very different from the, the, the core game that's been going for 10 plus years. And that could be a big shock to a lot of people. It must be doing okay in Canada, you know, if they're gonna do, if they're gonna expand it.
But that was like a soft launch that's been going for well over a year. And lots of like trying to run live ops for well over a year, like season passes and stuff. So, I am interested to see where that goes. But like at least there's something that's gonna come out and not just be. Shut down as far as all these, I assume, like I, let's hope it's not February 22nd.
And they're just like, by the way, guys, like you're closed and the game's not coming out. So, let's hope that's not the case, but.
Aaron: Yeah, we'll see.
Devin: Yeah. Another company though that did have some positive earnings and is, and is looking up pretty good. Roblox is an interesting one just because, you know, they've, they've been fraught with a bit more controversy over the last maybe year or so.
I'm not sure the exact timeline on that, but they've definitely been fighting off negativity as much as possible to keep that going.
Aaron: Yeah. I, I think Roblox is really impressive. If you look at the stock, it's, it's over 50% below its highs, and so there, there have been, you know, additional skepticisms that have creeped in from the public market, some of which is fair, some of which I think is overblown.
But I mean, I think Roblox is super impressive. Let me let even just pull up the, the stock chart right here to, to see. I think the, the stock is like right now the stock price is about $68. When it went public, it started trading around like $69 and 2021. So, you know, five years it's kind of been full circle of going down a lot, going up a lot, going back down a lot.
But the business has fundamentally grown tremendously in that time period. It was just a very expensive stock. Yeah, an expensive time when it went public. But what, what is interesting about Roblox is a couple things, and we talked about this, you know, a few months ago, but just a couple additional details now that 2025 is wrapped up.
I mean, first of all, 2025 was a huge inflection point for the platform as a whole. Like their concurrent users essentially doubled over the course of the year, and that was driven by these breakout games. Like Grow a Garden, steal a brain rot, 99 nights in the forest, I think, it's called and what's impressive is that, you know, it's these breakout games that drove the platform expansion as more people, you know, like join the platform than otherwise would because their friends were playing or whatever it might be.
And maybe some of the, the growth because of that was pulled, pulled forward from the future. But it truly was an incredible year. But what's most impressive about this, besides the fact that these games literally became the highest, you know, like the most played games in terms of CCUs of like all time ever, like in the games, games industry, like huge milestones for the platform.
And not even that it happened once, but like it happened three times in 2025, but you know, naturally the more viral that these games grow, the less sustainable they are and they, they fall back to earth because you know, you're not gonna have million, like 20 million people playing at any given time forever.
Right, right. Like, people are gonna move on, but. What's impressive is that even though many people have moved on from those games, like Grow A Garden, CCUs are like 99% plus below where they were at its highs now.
Devin: Yeah.
Aaron: But these people have stayed around on the platform. Yeah. And so, these are, these have been huge customer acquisition events for Roblox as a whole, and they've done a great job of keeping them around.
And that's just a super bullish sign for, for Roblox as a platform. And related to that, I, I read in their latest investor shareholder letter that published a couple days ago that Roblox revenue is now over 3% of games industry revenue. Wow. And yeah, it's, it's creeping on up there and they've, they've said for I think a couple years now, like their audacious goal is 10%.
And I, I kind of buy it. Like, I, I kind of, I see a path to getting there, like these, these years, these breakouts. Adding new cohorts, as you know, every year, like new kids are born, like there's new kids joining Roblox. Every year the, the content depth of what is capable of being built on the platform improves, and the, the platform has been aging up to some degree, and as it is aging up, like those people are the ones spending more money on the platform by quite a lot.
And so, there is a path, I, I don't know when it would hit 10%, if it'll hit 10%, but, you know, 3% is now the lowest it's going to be for, for quite a while. And its bookings growth this past year were pretty crazy too. And again, I don't think next year or this year, 2026 will be at the same level because, you know, you can't have inflections every year like we saw with Roblox.
But it has, you know. As I've said before, it's a, it's a compounding engine. It's like the snowball rolling down the mountain.
Devin: And the net definition network effect kind of thing.
Aaron: Totally. Network effects are massively strong and only getting stronger. And there's a lot of, very fair like conversation about like the child safety concerns and such.
And, you know, we might see some changes to, to laws over time that, you know, impacts to some extent, you know, what kids can do on Roblox. We're seeing in, you know, some countries, you know, more like, like anti loot box laws on minors and how that—
Devin: Well, that would kill half the games or more than half the games on Roblox 'cause like the majority of them seem to be loot box in some form or another.
Aaron: Yeah. And so, you know, there will be changes that you, these games have to put into place. But like, even so like. Kids are still gonna wanna like put the time in like, like the economy design does not matter nearly as much as just being able to like, have fun playing games with friends.
And so, I think the platform will, will adapt and you know, I think they have done a good job of being proactive on the child safety stuff. Like right now they're in the middle of, like forced like age verification.
Devin: Yeah, I tried that out. The visual age verification thing. So, then you can only talk to people your age. Although I do wonder if you like end up with gray areas where it's like if you're aging up and you're a little older than your friends, do you suddenly get aged out of being able to talk to your own friends? And so, I do worry about some of the details as they're starting to roll that stuff out to cause some disruption.
But it doesn't seem like something that'll necessarily like kill any of the momentum they have going.
Aaron: I don't know all the details. I think a lot of it is just restricting chat to—
Devin: Right?
Aaron: Like you have to be a certain age.
Devin: I guess you could always chat on Discord with your friends or something, then it doesn't matter.
Aaron: Yeah. There, there can be other workarounds, I'm sure. But in general, like I'm, I'm just generally very impressed and as I've said before too, there R&D engine is massive. You know, they spend well over a billion dollars a year on r and d plus, you know, hundreds of millions in CapEx to just continue building out the infrastructure to support everything.
And that's a number that just other companies can't, can't match. And you know, we, maybe we'll talk about GTA later in this episode and, you know, there's a lot of like, hopes about that becoming a UGC platform. But you know, it takes a lot of time and a lot of R&D money to, uh, to build anything close to the creator capacities that we see in places like.
Devin: Right, just as Epic. They've been trying.
Aaron: And it just takes time. Like the, I think Epic has been making steady progress. It just takes time and a lot of money to, to build out all the very complex systems in many different ways.
Devin: Yeah, I mean, I, I'm sure their, their hope is that they could catch the people that age out, but it doesn't seem like that's, if, if the growth is still what it is in Roblox, I don't think they're successfully capturing at least, you know, a, a significant portion of them as they age out into there.
I mean, at some point it's just gonna be, people are just gonna play Fortnite in. And then it's just gonna be like, well, sorry, you Yeah, you still the opportunity. 'cause it's just, you know, more and more complex games that get built on there. The Roblox just release more AI tools as well. Mm-hmm.
Alongside all this to, to try and help push, I mean, I, I haven't tested to see the, the qualities like on those, but they're certainly not shy of introducing things that make more players into potential creators, which seems to be their, their to their benefit. Right? Because that took a long, long time to build up like enough creators to get that platform rolling.
And I think Fortnite maybe struggled with that to some extent, right? Like, it's a lot more complicated platform to build for in some ways. And they've had to like, you know, teach people first and all those sorts of things.
Aaron: So it's tricky. Yeah. Yeah. Fortnite has, you know, its own restrictions just in terms of, you know, the ecosystem ebbs and flows with Fortnite as a whole and you can't charge for, you know, as much for like specific items and games to the same extent and, you know, all, all of these things. So yeah, there are more limitations there. But yeah, very bullish on Roblox. The last thing I'll say here is that, um, we're actually starting to work on our state of UGC 2026 report.
We've published this report for the past two years and it's been, you know, really popular and helpful to a lot of teams both times that we've done it. And I expect this year to be just as good and just as helpful. So probably, uh, by early March, early mid-March that will, will go live. But everyone can look forward to that.
Devin: I think it's always fantastic 'cause it's, it's a such a hard market to keep tabs on, like to pin down because it's by its very nature fragmented all over the place. Like there's no earnings report for UGC, so it's just, you gotta find a way you can get it. So I definitely appreciate all the work that goes into those 'cause it's just like a lot of collecting information and then synthesizing it so.
Switching over to another area that's maybe not like necessarily earnings driven as much, although I'm sure there will be plenty involved. It's sort of a broader one, which is now that we've had the holiday sales and now that we're deep into the, the ram trip shortage, as well as that could bleed into other chip shortages.
Who knows? Consoles have been kind of an interesting place kind of coming from, you know, where we saw them maybe last summer. And then there's, I think there's been kind of a good amount of changes or at least trajectory changes for all the major different platforms across that going to this year with the, with the chip shortages and stuff, you had price raises and things like that.
People can't really discount the same way even on older hardware now where, where prices on older hardware are actually going up instead of down and like Black Friday sales we're like, we're gonna go back to the old price, like for PlayStation, stuff like that. I, I mean, curious your thoughts on where we're kind of going say over the next, maybe even six months with consoles, because we're not like seeing necessarily even like, information on next gen consoles outside of Switch two so much yet.
Aaron: I, my honest take is I don't think much has changed here in terms of the trajectory of the, the main players, regardless of price increases, you know, the switch to was, you know, the best selling console ever. And you know, that, you know, shows that Affinity fans have for, you know, wanting to play Nintendo games and, and getting the, the latest new, new console there and, you know, that will continue to, to drive sales for many years into the future.
So, we're still like, very early and, and that growth curve, which is taking place while the other consoles are, are fading, you know, Xbox really been underperforming and the changes it has made lately. You know, just kind of further solidify that like price hikes later into the cycle. Like, okay, like that's not gonna change your, your curve in any material way.
Devin: Not gonna help it.
Aaron: Yeah. And, you know, increasing the prices of Game Pass, you know, is basically admitting that that business model did not work in the way that you hoped that it would, but you went all in on it. And so now you're in a very difficult spot. And we've talked about before, just like the tension between like, if you want to succeed in a console, hardware driven business, the biggest differentiator is your exclusive content.
But if you want to succeed in a subscription driven business, differentiator is having all of this content be as many places as, as consumers can buy it. And so, they're kind of fundamentally at odds with each other. And maybe there is a way to balance that by having a lot of exclusives that still drive the, the hardware sales and then having more like timed releases onto your subscription service that you have to have at a higher price for it to make sense and understand that that will never be the engine for your business. And maybe Microsoft goes more back in that direction at some point. But if anything, it seems like they've done the opposite just because hardware base has shrunk so, so much that they can't justify the cost of exclusives on such a small user base.
Right. They have to go to the, to their competitors like PlayStation to sell their games there too, to make it worthwhile. And they're still, you know, very much focused on, you know, allow their games to be everywhere. You know, this is an Xbox, everything is an Xbox and.
Devin: It's point.
Aaron: Your micro an.
Devin: Xbox.
Aaron: Yeah. It's just like, what is Xbox like? And so, so yeah, I'm, you know, not that optimistic about where this is going. To go, they need to hit the reset button, probably not even be in Microsoft anymore. Yeah. And, and reset. And then of course you have like the, the Steam machine, which is cool. It's interesting.
I don't think that's really a major threat to these other major console companies because, you know, there's, it's limited what you can play, but for people who are really into their Steam collection and just want to play via Steam in more places, I think it's a great extension of the Steam platform. And Steam is essentially taking an orthogonal approach to its hardware strategy in general.
That's just different from what traditional console players have done. And I think it'll work out well for them. But I mean, they'll be pretty niche for console. And so, yeah, I mean, like, whether it's tariffs, whether it's price tweaks, whatever it is, I don't, I don't think this fundamentally changes the, the long-term end game for these, for any of these, these major players.
Devin: Yeah, I mean, a couple of things on, on what you said too, like, it, it's definitely looked like in Microsoft been talking about, you know, their earnings lately. And Xbox is just kind of dragging, like everywhere was making money except for Xbox, which was certainly not hitting those 30% growth targets.
They were promising they'd be able to, to hit. And those, you know, part of the reason obviously behind the price hikes on the game pass, which it, it didn't, it didn't hit the mark. Right. And, you know, to the point of differentiating like, or, or spreading it across different platforms that actually seemed to be relatively profitable in terms of making money off of old games that were just sitting on the shelves at that point.
So, they definitely have some incentive to go, like, turn into Sega at that point. And not necessarily like why are we even a console brand? Why aren't we just like a brand that where Xbox is just brand? And I know like, it seems like, for example, you know, steam machine isn't necessarily like a threat, but at the same time, like, Sony's been porting more and more games over to Steam, PC and so it's certainly not, and and I don't think they're gonna break their exclusives, right? Because exclusives are still very valuable to Sony. But I do think that like there's, it's Xbox that's the biggest, like the biggest to be threatened to buy the steam machine in that sense because it's just, yeah, they're both just a PC.
And it's like if Sony's willing to bring their stuff over to Steam but not necessarily bring it over to Xbox. Your situation where it's like even worse for Xbox to be in, where it's just like, Microsoft's like, why are we even. Making this platform when it's just like, steam's gonna eat our lunch anyways.
And I don't think anyone's really buying games off the Microsoft store. I think so. I think they're just kind of like we become a publisher at that point, or spin Xbox off. So I think they're kind of, like you said, the trajectory has kind of already been carved or the past been ploughed, so to speak, over the last like year or two where they just committed to a path, whether or not it works and they seem to be going, whereas Sony seems to be doing okay.
It sounds like the price is a little bit of a problem for them, but based off the holiday sales, it sounds like they're like, well, every else is dropping out, so we still win by default kind of thing.
Aaron: Yeah. I I'm sure the, the pricing impact, like it does matter some for them, but in the big like competitive scheme of things, they're like so well positioned 'cause who is like really competing against 'em. There, there is no one that does what they, they do at the level that they, they do it and, you know, bringing games to PC. I think it's smart and they generally, you know, like space out the timing of the releases so that the proprietary hardware gets the, the biggest advantages there.
And they recognize at this point that, you know, people, the console market's not really growing. Like people who want consoles get them and people who don't won't, and they, and then otherwise, you know, they wouldn't be playing their games so they might as well, you know, increase their, their revenue by eventually taking their games to other, other platforms.
But yeah, we'll, we'll see. Yeah. I know there's been a lot of bullishness around Nintendo and, you know, they have, you know, like movies and stuff, new movies and such coming out, which are good. It'll be hard to live up to how successful the, the last Mario movie was, but the fact that they're keeping it going, that adds a nice high margin revenue stream to their business.
But yeah, I still, I still wonder at the end of the day, like, you know, the Switch two is. Doing very well, but is the games industry still gonna grow around a business like Nintendo? And if you look at like their, their base of just how many people are playing games and active on the Nintendo platforms, like it actually is down a little bit from its highs.
And it's not that that's a red flag, it's just a sign that, you know, these are very mature industries and businesses at these points.
Devin: I mean, it's too bad for Nintendo. They didn't have, or at least as far as I know, a, a Mario game slated to drop right around the time of the movie 'cause I think that could be a huge, I hate to use the term game changer 'cause it's terribly overused, but I think at this place it would make sense.
Because that would, that would really, I think just skyrockets which sales, because they've, they've. You know, not had, the greatest launch titles necessarily. So, it'll be interesting to see like if they can continue, like, push through this year because they haven't announced a lot, but then they've got, you know, the movies seem to be coming out faster than their games at this point.
Aaron: Yeah.
Devin: Mario Galax got Zel as well. Yeah, at this point. I mean, they, they did push out, like they're pushing out a lot of ports of older games, which is kind of an interesting strategy where they're like, we don't have a lot of new games to push out, so we're gonna like revamp old games. We're gonna try and re monetize them.
We're even gonna try and like overly monetize virtual boy emulation and, and they're definitely digging a bit. And so, it does make me a little concerned about their pipeline of new games 'cause they do seem to be suffering a little bit from some of the crunch on games in general in terms of like financial and the amount of effort required and the time required and stuff.
They, despite how successful they've been over so long, it seems like it's finally kind of catching up like the rest of the industry has. So, I'm, I am kind of curious to see if they're going to do something about that. Like, at least on the flip side, the, you know, the transmedia side, we're seeing, you know, a lot of success around, you know, whether it be TV shows or movies.
Like even if this next Mario doesn't do as good as the previous one, if it does even like, remotely close, which is very likely for, 'cause sequels coming after, such as successful movie, people just buy blindly anyways most of the time. Like, so you'll see a huge amount opening weekend, even if it like, tanks fast after that.
But like, there's even, like, it's, it's almost parallels the game industry 'cause there's actually now starting to be indie game movies that are actually starting to hit like Iron Long, which is like, what that that kind of came outta nowhere and did, I think it was 21 million opening weekend for like a 9 million contributed to that movie.
Aaron: For, thanks.
Devin: For better.
Aaron: Or worse. Thanks.
Devin: No, no. You're helping, you're helping the, the, whether you liked it or not, you're helping that industry succeed as long as we don't necessarily get like another Super Mario Brothers movie from, you know, the nineties one. But I think, it's looking pretty good. But I'm curious your thoughts on like, if this is, you know, like a cultural push, like we had the, the Marvel phase.
Some people think we're going, you know, superhero phase, whatever you wanna call it. Some people think we're kind of heading into sort of, whether that be like video games or video game culture sort of phase, like, and it did take a while to burn out the superhero phase. So, I…
Aaron: Dunno.
Devin: I mean, it could help the whole industry.
Aaron: I, I think we've been entering this phase for a few years at this point with, you know, movies like Uncharted or shows like The Last of Us. And I, I think that in many ways games are the new books and in terms of, you know, what previous generations adaptations were more based on books. But for, you know, like, you know, upcoming generations, it probably is gonna be more more game driven and yeah, directors that grew up with games, producers that grew up with games are gonna wanna make, you know, great content around great gaming worlds and stories.
So, yeah, I mean, I think this is a, a generational trend, like even more so than a, a right now trend.
Devin: I mean, it's interesting, like, I wonder if there's an aspect too of like the games themselves have become higher fidelity over time, if that makes it easier to translate them to movies. You can take something like the difference between Uncharted the Game and Uncharted the movie.
Like they're, you know, still at least relatively, you know, people and, and like, it's not crazy hard to translate that to a movie. Whereas like you look at the original Super Mario Brothers movie, and I think that was like, well how do we turn this thing into a movie? And it was kind of a, you know, a stretch.
But it was also like, how do you make a movie that, because the games were much more simplistic now much more games are like, you know, very like cinematic to an extent. And so, you take something like Last of Us Turn into a TV show, was that really that big of a stretch? I don't think so necessarily.
Like Cyberpunk turning that to, you know, an Anime tv. I don't think that was a big stretch. Mario, you know, the newer Mario Brothers move obviously goes a different direction, but that still kind of suits what Yeah, those games are. So, I think maybe, maybe we're also in a, in a period where it makes a little more sense to try and translate those.
Aaron: Yeah, and I think it'll be interesting to see how UGC plays into, to much of this. We, Kalie, one of our, one of our hosts interviewed the, the founders of Story Kitchen, which are producers. And they were talking basically about, you know, how user generated games are starting to be considered more in Hollywood.
And I think that team was even thinking about like Grow a Garden as a movie, at which like, you know, my first reaction is like, that makes no sense 'cause there's no story there or anything. But at the same time, like, they made a successful Minecraft movie. So, who am I to judge? I still am a little skeptical on some of these more viral UGC types of games because they also flame out faster.
They're not like long time. Proven franchises yet. And some of them are like, have become more that way, but most especially the newer ones haven't. But yeah, I think it'll just continue to, to evolve. But even as, you know, AI tools improve. Like it might not even be Hollywood purely what we're talking about as much as just better fan made type of content that you can see on, on YouTube or whatever other other platform.
Yeah. That becomes more of a, a force for building ecosystems like fan ecosystems,
Devin: Right?
Aaron: Around more of these experiences. I think that'll be an emerging trend that we see.
Devin: Well, I think something like Five Nights at Freddy's, one and two shows that even if it's a terrible movie, if there's an audience there, it can work to an extent. So, like, maybe it's just scaling to the right size of that audience.
Aaron: But I mean, yeah, by the way, I went to, I forget what it's called, like the Fright Fest at Universal Studios. I, I'm probably butchering that name a bit, but I went to the Five Nights at Freddy's Haunted House there and it was actually really good.
It was my favorite one that I went to this past year. And it was really interesting to see just how many people were crazy about the IP 'cause you know, it is comparing to, you know, just like other proven like horror franchises that are like competing for space and attention and yeah, that was right up there with the rest which I found super interesting.
Devin: It's funny 'cause it's almost like they have nostalgia for something that was from our youth, not from theirs. The, the whole Chuck E Cheese animatronics thing, so it's kind of funny, this weird sort of like blurred, like we get a lot of that these days where like kids are like nostalgic for things that like they weren't there for.
It's, it's very interesting. Like, and maybe just the internet having everything available on tap all the time. Speaking of like ontap AI, UGC, all that kind of wrapped into one, I think is a, an appropriate segue over to the whole Genie three story.
Aaron: Yeah.
Devin: Where we see this progressive push with Microsoft, with, with Google, with all these companies that are pushing AI to try and find some way to sort of leverage video games to get more attention.
And, you know, highlight some of the technology that they've been able to build. And some of that's just more like imitating games. And I think Genie's a good idea, or a good example of one that is more an imitation of games than it is building games. But it seems to have caught a lot of people off guard when it, with Genie three, where it was a bit more robust than the previous Genie.
Aaron: Yeah. Well first of all, I think Genie Three is incredibly impressive, right? Being able to generate worlds that you can like, interact with and do things in and add, you know, just kind of help it unfold in the way that you wanna see is incredible technology. Obviously it still is very early, but there are like really cool compelling signs of what will be possible to do here.
Seeing the stock market reaction to all of this though, did surprise me a bit. And on one hand it didn't entirely surprise me because having been in the investing world and being a, the public equities business before starting Naavik, I, I understand that much of Wall Street and the investment world just fundamentally doesn't understand the gaming industry at a deep creative level.
And so, you know, seeing an overreaction there, you know, was not shocking, but it also was an overreaction, right? Like, there's a fundamental misunderstanding between what these probabilistic models can do, which basically just make things up as they go, right? And it's cool, but games are deterministic.
They're built on rules. They're built on set narratives. They're, you know, they gotta work the same way basically every time. And these, in other words. Like world models do not replace game engines.
Devin: Right?
Aaron: And they do not replace what you can make on game engines. And so, seeing companies like Unity and Roblox be down 50% or so from their highs, seeing even take two fall 10% on the day just purely off of that news and just see much of the market, you know, be pummeled along with software and other things.
Like, it's not purely a gaming industry downturn right now in public markets. But yeah, there is a bit of a, a misunderstanding. And by the time this episode goes live, our latest digest piece will have published and, and Mika on our team who, who wrote it, he, he talked about, you know, project Genie and like really digging into the nuances of like, where is this interesting?
Where is it not? Like where have we actually seen. AI benefit game development. And one point he makes is that we haven't seen a revolution. Yeah. In, in game development from ai, there are all sorts of tools, even beyond world models, where you can prompt what you're looking for and these tools generate these gaming experiences for you.
And none of those have like truly blown up and become blockbuster successes. But where we have seen improvement is in a hundred different smaller ways across the, the stack of development. And that will continue to be the case. And what is more likely that we will see from these, these world bottles within gaming is that they will probably be a great tool to use for generating assets that then you can plug and retool, rebuild into game engines.
And second we'll probably just see some new novel experiences. Like, I don't want to be overly skeptical about it 'cause that's like saying, you know, 10, 15 years ago, oh, what are these games on Roblox? They'll never be fun. They'll never be competitive. And here it is today, we talked about over 3% of the games industry revenue and, you know, seeing inflection points.
Devin: Yeah. And so, oh, kids wanna grow a garden in a Lego looking place. That doesn't make any sense.
Aaron: Exactly. And so I, I don't wanna be overly skeptical about the technology. I suspect really smart teams will come along and figure out how to use this technology in novel ways that make really cool game-like experiences possible where Yeah, users can, you know, with certain like guardrails, figure out how to like, make and explore their own worlds, you know, with themselves, with other people.
And that be. Really interesting. But also, people have to realize too that with world models, the, the purpose is not always for games. A lot of it is to be a reflection of the real world with physics so that we can see more faster testing and improvements with, with other industries like autonomous driving or robotics or, or whatever it might be, right?
Or just extracting data to help, tune other models and other like, development processes. And so we're still very early in that it's not all about games and where it is about games. I think it'll be new and interesting, but it's not, it's not as devastating as the stock market would have you believe?
Devin: Yeah, definitely. Like there a lot of people like to, to, to assume that somehow gonna replace everything instantly. And I think that usually is never the case. Like it's just, it's just another technology that I think we'll see use as you mentioned, but it's just not gonna. Change everything all at once in the stock market, maybe react a little little spin too much to that.
Aaron: Yeah, and I think that, you know, in the same way that Web3 games is probably the wrong framing, it's just that leverage some kind of technology that, you know, has some kind of blockchain payment rails or tokens,
Devin: Right?
Aaron: AI games is probably similar in the sense that yeah, they're, they're just games that leverage new technology in new and interesting ways.
And even so, I still think what we see from this tech, maybe not world models specifically, could help accelerate the games industry at some point as we just create more ways for more people to be in these fun interactive experiences and, you know, have it be more tailored and personalized to what they're interested in.
And that be more competitive against the personalized short form video feeds that people are scroll through. It's just like a, you know, like a different version of like personalized, interactive entertainment. And so I, I think we'll see where that goes. That could still ultimately be a net positive for the industry, but, but probably not in the, the way of it blowing everything else up, I guess.
Devin: So interesting to think of it along the lines more of like a physics engine or certain style of graphics processing in games, like where it's like a technology that like can be part of the game and used by a game but doesn't define the game necessarily. Yeah. Or it does in another experience. Right. And it's like, it can be, it can go either way with that.
Like, physics just didn't define games, but they certainly became an important part of them and more and more over time. But you can still find plenty of 2D games with no physics, you know, all kinds of stuff like that. It doesn't replace it, it's just like, it's appropriate here, so we use it here kind of thing.
Aaron: Yeah. And just a couple quick plugs even to, to just end this segment. I mean, one you. Wrote a piece about roll bottles about a year ago we did it in partnership with, with Lightspeed. And you know, it's, it's a year old, so some of it is outdated, but it covers the history of how we got to this point and, you know, some ideas for how to think about it for the future.
And so, yeah, I definitely still recommend checking that out if you want to understand kind of the history of this trend and what all different teams have been trying to do with their different approaches to the tech. And then second, Alex Takei, another one of our, our, our great hosts recently interviewed Pim DeWit, who started Metal and recently has kind of rolled that into general intuition, which is a, a world bottles company that is built on a lot of the, the data that he gets from metal.
And there was some just really interesting conversation there about how to think about some of this too. And I expect that as this becomes. A bigger deal in the industry Will, will do much more. But yeah. Devin's piece from a year ago and then Alex's interview from, I think less than a month ago. Still are super helpful.
Devin: I think it's, I think the, the overall gist to, to me going all the way back from there is, is like games aside and all that stuff. World models will be super important. Like, so it's, it's good to know about them because they will be a important part of AI technology 'cause it's like, it just means like, can AI understand the world and like understand what, what worlds are like and things like that.
Yeah, I mean it's obviously beneficial as we go into robotics, especially there's a big push for that this year gonna be super important. Well, that effect games, hard to say on that one. Right. But it's definitely going to be a technology that is going to get a lot of investment and, effort, but speaking of investment, I guess we wanted to kind of towards the end here, just kind of play a little game of like, just looking at the market as a whole and in some different areas and just kind of calling out, buy, sell or hold. Obviously not necessarily investment advice, it's just for fun, but we wanted to kind of like, as a overall sentiment check and kind of a sort of future pacing the, what, what might be going on with some of these topics, companies, things like that.
So I, I mean, I'll just start off with one that we've, we mentioned off and on a little bit earlier, but we didn't like dive directly into just the company Microsoft buy, sell, or hold.
Aaron: Microsoft as a, as an entire business buy. But if you're talking about the games business sell and I think we covered the games business part pretty well, but as a whole I mean, Microsoft is, it's not a games business that really is a rounding error.
Devin: Which is the hard part 'cause you can't invest in just the game business part, right?
Aaron: Yeah. Probably for the best, and in this case, Microsoft or Xbox shareholders through Microsoft should be grateful that the rest of the business has, has moved in other directions.
But, but yeah, I mean Microsoft is increasingly like a cloud data center based business at the end of the day and has been at the forefront of, of scaling up with ai. And so, I'm pretty, pretty bullish on like all these hyperscalers in general. And we've seen all these reports lately from their earnings of late that they're all scaling up their, their CapEx to like pretty ridiculous degrees.
I, I forget exactly what it is for Microsoft. But even yesterday Amazon announced that their, their guidance for CapEx is like $200 billion, like insane numbers. And the, the reaction that we see from the market for these increased CapEx pushes has been generally negative because there's just questions about the ROI, but what we also see is that the demand far outstrips the supply of GPUs that, that all of these companies have.
And so, I don't know, I'm, I'm pretty bullish having just seen the, the inflection improvements in all of these AI tools, like what we've seen with, with Claude Code and the agents recently. Right. I've been playing around with Rept and building all of these various, like, personal tools for myself and thinking about how we can even use some of this to accelerate prototyping at Naavik.
And it's just very clear to me that at least in the, the workforce, the demand is not gonna stop anytime soon at all. No, I do not see an AI bubble on the horizon anytime soon.
Devin: And I mean, there will be bad investments regardless of there. You could consider those sort of a bubble, but not really. Right? It's just part of a, a cycle where you have to make investments and some of those are not gonna work out.
Aaron: Yeah. But you know, that's probably not Microsoft, which is one of the biggest businesses in the world. Yeah. I mean, my buy is just, I'm generally optimistic about that, but, you know, none of this is investment advice, so I'm not necessarily buying Microsoft stock.
Devin: No, no here.
Aaron: But, and you know, for them to, to double from here, they gotta add several trillion and, and market cap, which is easier said than done, but still potentially doable. But yeah.
Devin: I wanted to, I wanted to throw out another one that was kind of like another one that's gone varying on AI, and is public traded company, but a bit more of a wild card than Microsoft, I think, which is Krafton.
Aaron: Krafton, I'll, I'll give them probably a more optimistic hold. I, I like Krafton. I think it's a well-managed business, and I've always respected the fact that they have tried to pretty aggressively reinvest their PUBG money into new efforts in ways that I've always felt contrast to some of the more conservatism that you see in, in other larger publishers.
And not all of these projects have worked out, but that mindset of, of reinvestment and reinvention is, is there, I think at the, at a leadership level and still founder led, I believe, and I know Krafton is also one of the publishers that has at least spoken more about investing more heavily into AI and thinking about how it can transform processes and ways of working around the business.
I don't know enough about what they're actually doing there to like have like a strong, strong take of if it's working yet or if it's gonna take.
Devin: Though.
Aaron: Yeah. If it's gonna take a lot more time to like really sort itself out and be, and whether, you know, the GPU clusters that they're, they're buying, you know, like really pay off.
But I, I like the mindset that they have and I like the, the, the investments that they're generally making.
Devin: They just have to emerge from all that Subnautica drama.
Aaron: Yeah. Which is—
Devin: Shake that off.
Aaron: Which I, I don't think really is that huge of a deal. They could pass that.
Devin: No, it's just, I think the negative drag dragged down on them from a, a publicity standpoint at the moment.
Aaron: Yeah.
Devin: But, you know, they have plenty else going on. In fact, they even have like a new PUBG 2D game that's like, I don't, I'm not sure if they're the ones who published it, but I was, it was just interesting to see. They're trying to branch out.
Aaron: Oh, interesting.
Devin: But I was, it was on steam on, I think on an early axis right now.
I saw it. It was just, it's interesting they're trying to branch out that, that, uh, franchise a little bit. So definitely wanted to check out. I don't know. I'm kind of curious. I haven't tried it out myself yet, but thought I'd throw that out there. Yeah. It's more on like not necessarily specific companies, but like kind of trends I think is an interesting one that, you know, I think a lot of people have been thinking about more so over the last year or so with a lot of the, the games that have done well, which is AAA versus aa and maybe even more of just from a trajectory standpoint, buy, sell, or hold on those.
Aaron: Mm. I think the definitions of these things will probably change a little
Devin: Loose. Yeah.
Aaron: Probably lean more bearish on AAA and lean more bullish on very specific teams. And aa I think that the, the opportunity for smaller teams to punch above their weight is growing and that'll enable more of these smaller teams to just compete at AAA level.
And we've, we've seen this, you know, even like Embark Studios, what they've done with the finals and a graders like, you know, it still probably leans a bit more aa, but even so, like the team sizes and budgets, they're a fraction of what you'll, what you'll see in an EA or Activision. But they are competing at that level recently with, with Arc Raiders.
And it wouldn't surprise me if we see more of that. I mean, obviously game of the year last year, Clare Obscure: Expedition 33 is another type of team that that fits that. But you know, I don't think these are necessarily one-offs as much as signs of what's to come. And I think that even the funding market will start to reflect that more and start coming up with more specific structures and ways to support the, you know, the hyper talented small teams with big ambitions.
Devin: Yeah. It's like Nexon learned a lot from that, from Embark, and I think that was like a really good sign of like, they like, wow, there's actually something here. Like there's ways to like approach this that are good and they, like, there were synergistic where Nexon can provide things to embark, embark, provide things back.
I, I hope Embark shares their secret sauce a bit out because they, they've talked a lot, a bit about I improving development processes and all these other things, but not really like, share the recipe to the rest of us that are having to make cuts everywhere. It'd be nice because I think we could all use it right about now.
Aaron: Yeah. Yeah, we'll see. I, they don't have to share. Yeah, they, they're, they're special sauce, but I, I doubt they'll be the only team that emerges like that in the Yeah. The coming years. But of course, like, you know, while there are these hyper talented teams to still be optimistic about, and, you know, those can kind of hold the torch for, for aa, if you want to call it that, that still is maybe not representative of the entirety of AA.
And as the market continues to get more competitive, like more games continue to get released every year, the barriers to creation keep falling. You know, most of AA will get squeezed, but the kind of, the top of the, the top tier of them will, you know, transcend and make the, the rest look good, I think.
Devin: I guess it'll just be a matter of like whether or not we can like slowly crawl past the whole, like AI minefield that seems to be attached to it for both clear, obscure and embark, uh, that at least Embark seems to be managing to like get past fairly well. But it's like there's just always this sort of at like stigma attached to it, even if it's like such a relatively like minor use or a use that like, it seems relatively fair game.
But I, we're not gonna go into the, the, the ethical quagmires there, but it just seems like that is sort of a little bit attached at the moment. I mean, it feels like hell divers too is one of the few that like managed to dodge that 'cause as far as I know, they didn't have any AI stuff attached to it, but it's like, this seems to be, because it's, as you mentioned, it's clearly finding more use.
It's clearly empowering AA to be able to punch a bit above their weight in certain areas. So it'll be, it'll be interesting to see if that becomes a sticking point for that sort of growth or not. And as you said, like the lines blur between what you call AA and AA anyways. It's more just a, call it what we, whatever, whatever looks right to at least have an interesting discussion versus, uh, you know, EA versus Embark I think is a pretty big different discussion in terms of like, scale, so.
Aaron: Yeah, for sure.
Devin: From that angle though, like it's, and it does involve all these really actually, is PC gaming as a, as a trajectory? Maybe, maybe compared to consoles, maybe not, maybe compared to web games even like, or stuff like Roblox. More than just kinda multi-platform, just PC game in general buy, so hold.
Aaron: Yeah. I mean, I think generally a buy, I don't think we'll see crazy growth, but I think that we'll see some,, especially as, you know, more of the world, you know, you know, takes on gaming PCs. And, and yeah, I mean, and maybe like the caveat to this is that, you know, companies like. Like valve sort of changed what it means to like play on their platform. Right? We talked about how they're entering console as well, but it really is just like an extension of their, like, of PC gaming for them and not really as much,
Devin: But, but don't play their, don't downplay their controller though. That I think that's, that gets downplayed too often. I think that's still innovative above most of the other console controllers out there.
Aaron: Yeah. Yeah. Not, not saying that at all. Like I actually like what they're doing is, is really impressive to me and I'm, I'm really curious to see how it, how it plays out. But, but yeah, I mean, as a whole, PC gaming will continue to creep up I think over time, but seeing more of like the, what these leading companies do to expand to other platforms and just basically take what you do on PC elsewhere, I think is, is interesting.
Whether it is Steam, whether it's even Epic, you know, just continuing to try to try out what they're doing with, with new platforms and like, you know, being on, in new places. You know, that, that is additive even if it's not world changing.
Devin: Yeah. I guess you even have to go in the other directions with like Epic trying to be on mobile too.
Aaron: Yeah, exactly.
Devin: Their store.
Aaron: Also, I don't.
Devin: Also, I'll see a valve store on, on mobile though.
Aaron: Yeah. Also, just to throw some of this back at you, I've been, you know, paying more attention to prediction markets lately, just as they've been blowing up. And for the video game industry, there isn't a lot of activity on prediction markets.
But even so, it's kind of interesting to just see what people are talking about. And so, I was looking at Kashi and Poly Market and you know, one interesting pattern is that basically like almost everything that is on both of them is related to GTA six, right? And so, you know, part of me wonders like, what are people even gonna talk about?
What's GTA six comes out? Well, like what are people gonna be looking forward next? It's gonna be hard to top that, but a couple things that I think might just be worth getting your reaction on too, just for the, the, the fun of it. One of the predictions is will GTA six launch be postponed again?
And on poly market there are 34% odds of that. Would you buy, sell, or hold those odds you think?
Devin: I would say the odds are definitely above zero, but I don't think they go above 50%. I think, I think sub 50%. But it's definitely a possibility because there's so much writing on that at this point. It's like make or break the, the whole game industry.
It seems like at this point when it, when it comes to perception and I think the money that was made off the first one, you know, or the previous one was so much that you could justify so many delays. It's just a question whether it take two's, like, look man, our quarter quarterly reports, like, you gotta kick this thing out this quarter for our, for our financials.
I do think, and I predicted a couple of their delays before in previous round tables and stuff like that. And that's not too my own hormone. I'm, I'm gonna say that I don't, it's a—
Aaron: Good bet for, for—
Devin: Yeah. I don't think they will this last time, but there has been, you know, like, you know, some layoffs and other things and attempts at unionization, stuff like that, that could cause some delays, but I think they're more likely to kick it out, not a thousand percent polished than to delay it again is my, my take. But it's, it's a non-zero odd still.
Aaron: Yeah, a month ago, the odds of it getting postponed were over 50% on poly market.
Devin: Yeah.
Aaron: And it dropped to about 25% recently and is now, you know, 33 or 34%.
Devin: I mean, they did put the marketplace out for, for the mod stuff, and maybe that was like a delaying tactic, like everyone look over here.
But it, it certainly is like, it didn't have any negative effect on perception of, of the launch 'cause you said the, the predictions have gone down. Maybe that's just people waiting and seeing no negative news and being like, well, maybe it is on track.
Aaron: Yeah. There also are on calc, predictions for a game of the year. And GT six is at 41% odds. Second is Fable at 17%. Resident Evil Requiem is, is 6%. And then it just like, you know, falls from there. I think Wolverine, Fable.
Devin: Sounds more like it's getting like a razzy than a game of the year. From, from everything that, that the track that's been going down. I don't know.
Like it, I mean, I could be wrong, could be see, seeing biased information, but it's like, it definitely doesn't look like that was on a good track for game of the year kind of thing. But you never know. It's awards shows, like they have their own particular biases too. So, it could, it could go any which way.
But I do think, I, I do wonder like if GTA would be like considered a game of the year kind of thing, just because it's like, you know, like, is that an Oscar movie kind of thing, right? Like where it's like, it may be the most successful movie of the year, but that doesn't mean it would win an Oscar kind of thing.
Like it, it definitely will. It will it strike the judge's fancy? I guess that's, that's more of the question than whether or not it's game of the year worthy 'cause I think if it delivers even like half of the hype consistently, it's, it's worthwhile. You know what I mean? But it's like, I think it's, you know, we didn't touch, touch a ton on GTA earlier, but I think it's worth noting that like it's, it, there's been this slow ramp up where GT a's still been making money and I was just checking steam charts yesterday and like five M, their mod launcher.
Has been trending upwards still since the MOD tool launched, I think, or the Mods Marketplace, stuff like that. Yeah, there's clear interest there still. People aren't like, I'm bored of GTA now. I think I'll go elsewhere. I, I just think the hype just gets, you know, as, as Bain once said, the fire rises, I think this still on track for that, so.
Aaron: Yeah. Yeah. Well, yeah. Well, we'll have to get over Wolf on at some point to talk about what they're seeing. Absolutely. Seeing the, the, the mods for what that could become. Yeah, another just like quick thing there, is one game that has 5% odds already is Halflife Three.
Devin: Right. So—
Aaron: Which is not even announced.
Devin: There's, there's been a lot of, well still deadlock wasn't even announced, I don't think yet. And I've been playing that for well over a year. So I, I do think like they have been, there's been a lot of, pretty close to validated leaks on Halflife through progress, but they, they work on valve time. So, it's like, if you're talking about eventually, I think, I think Half-life three will eventually come out.
It'll be amazing. Soon. Probably not. I think that's, that's the logical back.
Aaron: Yeah. And winning game of the year. 5% odds.
Devin: When it comes out. When it comes out. Like I said, for this year, probably not, but I do think there's, there's always the possibility Valve looks at Steam Machine as a, as a opportunity to have a launch title of like Half Life three or, I don't know if deadlock would be close enough either, but we don't know where Half-life three is at.
But I would love to see them do another orange box kind of thing. You know, take something like deadlock, take something like Half-life three. I'm not sure what else they got cooking, but I think they could, they could put together something really interesting and just blow everyone away and then drive huge interest in the Steam Machine.
The way the orange box actually landed really heavily on consoles. When it finally hit there, I mean obviously it helped launch, you know, Valve its Steam altogether. But like previously they had said in that one documentary that came out a little while ago that they just didn't feel like there was a need for Half-life three at the time.
It wasn't that they were against making it. They can count to three. They just didn't see any point in it at that point 'cause they didn't have anything new to do. And I think they've proven they have new things to do. They, the Half-life, Alex proved they had new things to do in that area and you could consider that a Half-life three.
Yeah. And then, you know, they, they even messed around with stuff for the steam deck. They're the crazy like tutorial kind of thing they did. So they've, and playing a lot of Deadlock again recently as well because they've been introducing new characters is still a great game. Even if it, it's very polarizing.
Aaron: So, yeah. But anyways, I, I think these prediction markets are interesting. Great. And I hope they get more robust on just across like all industries because it's interesting to, to see. But yeah, there are other things here, like is the PS six gonna be announced before 2027 and you know, there's 78% no odds, which I feel like should be higher.
There's also like more random things like, well, Bethesda released a new Fallout game before July, which is like, why? Like why is that a question? Will it be—
Devin: Playable?
Aaron: But you know, the no is at 90, like, I think 91%. So, you know, there's a about 10% saying yes, which I don't know, maybe is easy money, but maybe you could get burned if, you know, there's a, a mobile game that comes out of nowhere.
Devin: You know, there's very little protections from a lot of abuse of those markets. So, I wouldn't take them as gospel, but they're certainly interesting to follow.
Aaron: Some of they're gonna grow and some these are low volume too, and so they're not maybe the most accurate, but no, even so I think that these prediction markets are gonna kind of tell, help us gauge better and better what's going on around the world and all sorts of like very niche ways. And so, so yeah. Hopefully maybe we can check back prediction markets in the future.
Devin: Hopefully some's come true 'cause those were good news kinds of things, so.
Aaron: Yeah. Yeah, yeah.
Devin: I'll take 'em.
Aaron: So anyways, random, random thing to close on. Absolute. But I found it interesting.
Devin: Absolutely. Well, this is, this is one big talking version of a prediction markets, so definitely, definitely appreciate the extra, the extra questions there.
Some, some interesting topics that come from those, I'm sure. And the year just started. So, I think it's important to, to point that out, that we've just gotten ramped up for 2026 and I don't think it's gonna be a slow year. No matter I, regardless of what, uh, changes are gonna happen, it'll be interesting.
So, appreciate you all for, for tuning in. Appreciate you Aaron, for jumping on. Always great to have these kinds of conversations. Especially a nice change of pace from just, you know, interview style stuff as well. Like, I think there's a lot of interesting stuff going on and, you know, we cover a lot of it in our digest, but in a little bit different format.
And so, if you're not, of course, reading that, make sure you are, 'cause you should be. It's, it's great, it's fantastic content. I'm not biased at all, but I, I think it is wonderful and, uh, it comes out a lot. There's a lot of content, so make sure to check that out as well as, of course all the, many of other interviews, other hosts at the things we have going on here at Naavik.
And of course, you know, make sure to reach out to us also, you know, we'll see what's going on with GDC, but you know, I think, you could reach out to, to us as well and see what's going on for that next month.
Aaron: And the, the newsletter will be probably soon giving out a shout out for just lining up for booking meetings and such.
If we do have any event plans, which we would probably do with some of our, our partners, we'll also let you know there too. So, so stay tuned. But yeah, definitely look forward to seeing some of you at GDC. It should be a good time.
Devin: Cool. Thanks again, Aaron. And, and hopefully everyone's gonna have fun with that. and don't get too crazy.
But appreciate everyone tuning in and of course, you know, you know, feel free to discuss our predictions and, and opinions out there on social media. We'll, we'll see you on the next one.
If you enjoyed today's episode, whether on YouTube or your favorite podcast app, make sure to like, subscribe, comment, or give a five-star review. And if you wanna reach out or provide feedback, shoot us a note at [email protected] or find us on Twitter and LinkedIn. Plus, if you wanna learn more about what Naavik has to offer, make sure to check out our website www.naavik.co there. You can sign up for the number one games industry newsletter, Naavik Digest, or contact us to learn about our wide-ranging consulting and advisory services.
Again, that is www.naavik.co. Thanks for listening and we'll catch you in the next episode.
