What's up everybody welcome to a very special kind of funny games cast for Thursday February 20th 2025 I'm gonna be host Greg Miller alongside executive director in video game industry analyst at sir Kana Matt Piscatella Hello Matt hello, hello Greg Miller hello chat hello fellow video game enthusiasts really great to be here I can't believe we're finally getting you on the show Matt as much as we have bancred back and forth online Whether it be the old days on Twitter the new days on blue sky wherever it may be whether it be you big timing me at Lawson's Carvery Not you know, I mean it's E3 you're right in front of me and you won't even stop your conversation to say hi I forgive I forget don't worry it was it's one of my darkest hours and something I regret all of the time I feel terrible about it Matt thank you so much for taking time out of your very busy day to come talk to us today and answer the question is The gaming industry doomed before we even get into that not everyone is as dialed into social media as many of us Are not everybody pays attention to the names we read every day on kind of funny games daily? Who are you and what do you do? Very envious of those people you're making the right decisions Well, my name is Matt as Greg mentioned. I'm the executive director of video games at sircona, which is formerly the NPD group We had a little bit of a merger a few years ago before that I spent a bunch of years at Activision and then Activision Blizzard Where I did everything from trade marketing analysis to business intelligence and greenlight forecasting And then went over to Warner Brothers games for a bunch of years I was the vice president of sales planning and analysis over at wb game So everything with a number basically if you've ever said hey, they dropped the price of a game or hey They priced that game at this or hey, they're not putting enough copies in a store.
I was they You were the problem Yeah, I did all the bad things I guess so I think you know the question I have before we jump into all this stuff But talking about you now being this video game industry analyst at sircona What does that look like on a daily basis for you? I know you of course from the fun social media graphs and information you put out about you know Year over year month over month. This is what's happening. But what does that look like on a daily for you?
So my job is to dig deep into the data whether that's what people are playing where they're playing what they're playing Who they're playing with why they're playing and uncover the stories that will help Folks in the industry whether it's publishers or retailers or developers help them understand where the player is and what might be coming next So so my job is to find the story in the numbers and be able to tell that to folks So they can make better planning decisions and when you say the numbers does that mean you're Going through what steam DB every day you're waiting for whatever trinkets that a PlayStation xbox will give you about one for the active users We have a number of ways we collect all the physical sales from retailers We collect all the digital sales from participating publishers directly from the first party So we have all the actual data there. We also do extensive primary research across a number of different panels and studies and surveys We're in every we're all over the place when it comes not just to what's selling But also what people are playing and where and why so you know the stuff we talk about publicly is a very small portion Of what we're doing It's it's like the tip of the iceberg in terms of what we're looking at and what we're trying to understand and listening to the consumer and trying to better Satisfy what they want and need Excellent. And that's why we're gonna have quite the conversation about if the video game industry is doing right after I remind everybody that this is the kind of Funny games guys each and every week to have a variety of platforms We run you the biggest topics in video games whether it be reviews previews or conversations We need to have you can watch them live on youtube.com slash kind of funny games twitch.tv slash kind of funny games and podcast services around The globe each and every weekday if you are watching live Why not be part of the show get your questions teed up for Matt by using the youtube super chat function You can ask questions to Matt to me the discussion topics get it all in there So we can have a great podcast remember if you love this show you need to support it We're an 11 person small business all about live talk shows We need your support with the kind of funny membership over on patreon.com slash kind of funny youtube.com slash kind of funny games apple and spotify Get to the membership and that gets you all of our shows each and every month ad free the ability to watch the afternoon podcast live your Quorum and of course you daily those of me and a series we call great way How's keeping for you? Like I said we're all about live talk shows you already got the pokemon presents predictions over on kind of funny games daily And after this you're gonna get a stream with andy and nick showing off of out with nvidia dlss for For our sponsor stream from our friends and video also you might notice no blessing no mic today That's because they're winged at the chicago right now and they're doing a meet up on friday If you want to go to the portillos off canal and tailor at 730 pm you can meet and greet mike and blessing That's not enough for you.
Remember of course the patella collection is live right now You can grab our new design or one of our vintage porty designs over on the kind of funny merch shop at kind of funny dot com slash store to celebrate our 10-year anniversary There's a couple copies of my book portello the wiener dog thinks he's a manatee and of course you can get the portolini pasta It's a dachshund shaped pasta from our friends at mill valley pasta all on kind of funny dot com slash store If you are a kind of funny member my greg way about captain america will be up momentarily And of course you can get predator in review this afternoon just like our patreon producers will delaney twiney carl jacobs omegabuster and karen lindener Thank you to our sponsors built rewards factor and stash But we'll tell you about that later for now. Let's begin the show with topic of the show Matt I did a great job team you up. I showed you know the numbers You're listening consumers you're paying attention to the graphs and stuff The question here is is the video game industry doomed because a lot of these numbers don't look great when I hear them When I ask you is the video game industry doomed? How do you come at that answer?
Well, firstly make sure the mike's still working. I kind of crapped out. It's not great. You look great.
It's hungry Awesome. All right. What kind of time and line we talking about here? We talking short term couple years or like in a million I love this podcast already.
I love this podcast already. Give me the short term in the long term. Are we doomed? What's happening?
All right, so no in fact Consumer behavior is very strong like the the demand from folks for video game content Whether to play or spend is still as high as it's ever been What the challenge is and where the change is happening is where they're playing why they're playing and where they're spending and we're in a period of really Big meaningful change. Uh, but the good news is This is pretty easily explainable about how we got to where we are the big challenge is What's happening right now in the uncertainty it brings and then what happens next sure? Um So so no, but things are certainly changing in pretty fundamental ways. I love that response for you What is the biggest fundamental shift you're seeing right now in forecasting for in the next five years?
Well, there's there's two things. Uh, the first thing is where we are in terms of the total industry now for decades, right? Video games in a growth category big growth as more players enter the space as more ways of play developed Organically the industry grew in 20 and 21 that changed everyone who wanted to play as much as they wanted to play and spend as much as they wanted to We're able to so instead of having organic player growth in a lot of markets. We hit a ceiling now There are still pockets of air.
There's still territories where you know growth is still happening in a big way India China Brazil sure but for those territories that have had a video game market for a long time We've hit ceilings and so we've gone from a growth industry to a mature industry and what that means it kind of changes how people look at investing Uh, the other thing that's happened of course is the live service game revolution. Um, I have some stats for you We could get into in a bit But the amount of players and the amount of time that are going to the biggest live service games in an era where we have more games being made than ever before And when we have a ceiling on player count is making a really big height bunch of Competition there that's that's been absolutely brutal. Um, and we can get into that But those two things are what are really combining to kind of put us where we are in terms of the market I love all that so the one I want to double back to you talk about in 20 and 21 that change that we went from a growth market to a mature market When you say that is that just was that covid related because that was our big thing It felt like in 2020 right everybody's at home and suddenly people are like well, I'm just gonna buy a place to come and buy next box and do whatever Is that what that really was? Absolutely the stay home activities people change their entire social lives to revolve around gaming and we saw a significant Growth in both player count and hours across all demographic groups across every psychographic profile Um, you know and hopefully honestly we never have to see that again Uh because you don't want a society that's forced to stay home and play video games, right?
We want to do that when we're, you know, not going to work one day or playing hooky from school Playing hooky wow, um, but yeah, so like that's what that was all about And and you know when you have that happen and all of a sudden you go, okay. Well, this is the player base This is as big as it's gonna get how do we grow and the only way you can really do that is to have each player That's still playing pay a little bit more which is another reason why we're seeing some of the things we're seeing from publishers and developers So then fascinating My question really then becomes is we're talking about the future we're talking about this you have this mature market every in 2021 who get it Is Are we you you listen to the show you hear me talk all the time then i'm like i don't know what i'm talking about But i think i got it okay grasp on this am i right when i'm saying the layoffs and closures and all of this happening is because we're still seeing Publishers venture capitalists investors who bet on the growth they saw in 2021 2021 not stopping do they do this thinking they do this not knowing we're at the ceiling Some absolutely um thought that that growth was going to continue Um others were a lot smarter about it. But yeah, some of what we're seeing now is from overinvestment Uh driven by this idea that you know the line was going to keep going up when it came to players and ours and it just didn't Um all kinds of reasons for that people had to go back to work had to go back to school Really had to go back to work because the prices of things around everyday spending categories from housing to grocery have continued to accelerate And you know people are really getting squeezed so they're making decisions Um about what to do with their time and their money that's having an impact and what we're seeing in the in the video game space Surely so that's a big part of it. Um, you know when you're a growth category forever and you change to a mature category All of a sudden the the economics around investment decisions change significantly You're playing a share game rather than a growth game meaning that you know for a long time the market Would grow organically so you could grow as well all you know the tide lifts all boats And this kind of market if you're gonna get an hour of playtime you have to take it from some other game or some other platform Right and so the entire dynamic of the strategic decisions and tactical decisions change Uh based on what happened there So then my question now becomes Are we To a point when we look at developers when we look at uh people making games where the bloodletting will stop soon Like are we are we to a point where people who want to publish games understand now that there isn't this infinite growth They understand they could hopefully make this much profit and that they're investing in things are going on I'm drawn to the one the only Jason Shrier, of course I subscribed to his uh bloomberg newsletter called game on coming out of dice last week where I hosted a workshop I was crushed every love my performance.
Um He has a whole thing in here talking about how well, you know, it used to be this it used to be that and now there's not a great vibe Right, but despite the patch bars and coffee shops the vibes were not fantastic at dice last year The most common phrase in town was quote survive until 25 end quote this year those who have made it are looking at a new pithy Men are looking for a new pithy mantra perhaps persists until 26 It talks about of course tens of thousands of people have been laid off venture capitalists who were once offering huge seed rounds and hefty valuations As they look for the next roblox if scaled back in a big way global turmoil and soft and appetites have scared off investors from chinese companies Few believe that this wave of layoffs is over Taking that context and that color and applying it to the numbers are you seeing publishers venture capitalists wake up to the fact of where we are now? Oh, yeah, the the risk calculation is happening Maybe to an extreme on the you know on the downside meaning that you know as as over enthusiastic as some folks may have been in like 2021 Or now seeing the opposite where we have maybe a little bit more pessimism than is really warranted Oh, okay, you know, that's kind of natural It's never as good as you think it is when it's good and it's never as bad as you think it is when it's bad And I think that's kind of where we are the survive the 25 thing Yeah, I use that phrase to you know, I think I might use it here the beginning of it But that idea was all around switch to grant that auto six reinvigorating folks to come back into gaming that may have stepped back from it Over the last few years and getting investors excited again about the category So maybe we should have survived for the middle of 25 or whenever they delayed GTA 6 to whenever that actually pops out I can't I can't even think of that. I would get another ulcer and I've got too many Okay, so then I like to hear it's not as bad when it's bad. It's not even as bad as you think it is that that's helpful Uh in the short term What are we looking at like again?
I kind of asked it but I'm like I monologued for a while there like Is the blood letting going to let up soon? Are we going to get out of this where the how many more cuts can there be? Oh, um, I hope so Uh, the challenge we have right so let's talk about service games for a second Please uh if you take the top 10 Service games every month you're talking grant that auto online roblox gta or call of duty marvel rivals right now Sure you take the 10 biggest live service games on playstation and xbox Seven out of every 10 people that turn on their console will play at least one of those games every month And in terms of total time they're taking those 10 games alone every month take up 40 Of total playtime on the consoles. So, you know, you look back 10 years before the big revolution of live service games You know people would get the big game.
They do to the next big game move to the next big game You have that full pool of players and hours to pull from Now because of these live service behemoths half of the gaming time On consoles is just gone. It's going to be eaten by those games, right? So you're fighting more and more for those hours and players that are remaining You know, the other part of that is the audience is really changing their purchasing behavior Then they had even 10 years ago now your audience right the people here in the chat You're on the very extreme enthusiast side, right? Let me tell you you're watching a live video game talk show Yeah, you're you're not the majority just real quick on purchase frequency like how many but how many games someone buys Uh in a period, right?
Yeah, 30 percent of people that play video games will not buy a video game this year That's a third of the audience that's just won't buy a further 18 percent purchase a new game every six months or less frequently So these are your folks that are buying madden or eafc or they're picking up call of you Right? You're your big mass market only kind of buyer the kind of purchaser that's watching the show You're probably buying at least one game a month. Maybe more Only 12 percent of video game players buy a game once a month only 4 Buy games more often than once per month So, you know when we're talking about the developers and the publishers that are really being you know Hurt the most that we're talking the most about are the games that are really targeting this like 16 percent Of total players that are you know purchasing very frequently while the mass majority Of players are buying a game or two or year and they're playing fortnight Minecraft and Roblox And I think that's like the biggest challenge the biggest competitor to any new video game is fortnight I will die on that hill no matter what it is because you have to fight fortnight before you fight anything else to get your game scene And purchase and that's like the biggest challenge I think happening right now The question I always have when we talk about this and we're talking about the numbers and blah blah And obviously when we jump to people trying to compete with fortnight trying to put out the next great live service Right? Rest in peace conchord and move on all these different games and I know conchord's live search It's the conversation I have the question that raises here is is everything you just said Good news for indies.
We talk about indie development, right? You talk about in this 18 percent that are the hardcore buying multiple games in a month I always talk about on these shows right that the level of success kind of funny needs is so much smaller than level of success IGN needs on their videos, right? And so I look at game development that same way when you see inevitably a square-annex publisher game and they'll be like a Didn't be an expectation versus so many mouth-washing sold half a million copies in there over the moon in their coming console now It's gonna be great like when you we talk about this and how hard it is to make that big game and get that share of time Do is that good news for indies because they're making something smaller with a sea level of success a level of getting into the black? That's better So there's opportunities and there's risks right the ability to be flexible the ability to have a smaller budget the ability to like Do whatever you can do in a much faster fashion than a big publisher can is absolutely advantage The challenge is discoverability is getting more difficult rather than less difficult The democratization of publishing means that we're seeing just this rapid increase in the number of games available whether they're actual Good well-developed games or games that are just churned out, you know what I mean?
Yeah, of course the shovelware out there like the competition for discoverability is really difficult So there's there's pluses and minuses there, but personally, you know When a when a game does hit from the indie space it hits in a pretty big way now that it might not have before But boy is it really hard to get seen right sure that's the challenge Uh in this conversation of talking about bringing up Square Enix talking about indies I liked this blue sky post from you February 9th Look sometimes sales expectations for a game are based on reasonable benchmarks and forecasting But often they're the result of a formula that includes things like costs and profit expectations Folks at pubs know when a target is aggressive, but you don't plan a sales target that loses money It's reasonable to make an argument pointing out where breakdowns happen that caused a game to disappoint But it isn't because folks at pubs aren't hyper aware of what reasonable sales expectations are Can we go into depth on this because this is one of those forecasting things that obviously we don't know ahead of time and then it is Guess what dragon age the veil guard came out after going from being a multiplayer thing to being a single player thing to getting all this Different hate and then it didn't and then they're like, yes, what it didn't move nearly enough copies for us to think it's a success And we're all like well that's a good number of copies, but you only gave it two months Like can you drill into this a bit with me and talk about what sales expectations really mean in this industry? Sure like this is this is what I did for a decade Both Activision and Warner and everything from Mortal Kombat to Arkham to lego to call the duty and guitar hero sure Um the process works So there's a process called green light and it's basically a gate where a game is either greenlit for further development or redlit meaning development is canceled There are numerous gates that go all the way from concept phase all the way to launch You know there could be six seven eight gates depending on the length of development at each of those points A forecast is created a P&L is great a profit and lost even which takes into account both You know potential revenues and potential costs and ultimately to a profit Um a profit estimation In order for a game to get through those green lights everyone involved in the planning on the most senior leadership all the way down Has to agree that we believe there's a chance that this P&L is possible that this profit is possible Right and so as inputs change whether hey we need another another year of development That's going to cost x million dollars. Can we absorb that? Can do we think we can achieve a higher metacritic?
Can we get to a bigger audience? How is this going to be likely able to allow us to increase our revenue expectations? If so then those levers all change it's all part of a big equation And at the beginning you may have a hey, here's the game here's our expectations on when it'll launch what platforms it'll launch on the genre Everything that could make up a game's basically quantifiable components and you come to a sales target Say we think this game can sell 3.2 million units, right? But over time as all of those inputs change all of the intricacies happen over the course of development That number can change quite a bit so long as everyone holds hands and says, okay We're gonna believe that we can do this we're gonna believe we can hit this target Even when everyone knows that hey, you know, this is a pretty stretch case like this is a very optimistic scenario But we think it's possible.
In fact, let me turn it around right like vanguard in particular Belgard had a very troubled development. It took a long time a lot of years courses changed a fact the game continued to get greenlit Was a show of confidence that they believed that this game was going to be able to overcome the challenges it had in development, right? The fact the game made it out is actually a very positive thing because I've been a part of a lot of games where we just said You know what this isn't gonna work cut it and that decision is extremely difficult If a game is canceled in development it is for darn good reasons Because there's no belief that the expectations would be able to get met It's a very drawn out. It's a long it's a process that involves so many people so many inputs so many opinions And at the end of the day, you know, you come up with a number That number might not be exactly what you think that game is likely to sell But you think there's enough likelihood that it could that you believe that it's still worth putting the game out and whenever that happens It's it's a great thing because it shows that people are believing in each other that this thing could actually work And sometimes it does and sometimes it doesn't but it's not because everyone didn't understand you know what was happening along the way That's fascinating and one of the questions I want to present and then give a hypothetical one is right when we see games get canceled Especially when they're further on I always talk about the point of no return And again, this is just me talking not knowing anything But all right the game's been in development so long I always think of the idea of well Some money from the project is better than no money from the project Is that a foolish or am I summing it up?
Am I being too simplistic with that answer? Because obviously there's plenty of games that don't make it out through the gate and I think you know Yesterday two days ago when we talked about fair games and the rumor that it's been delayed further out or whatever Me and I've been saying for a while and blessings now on my team of like fair games I don't think's ever gonna come out so I do expect one day to get the answer that they've canceled fair games But then the conversation yesterday two days ago when blessing brought up my thing and tried to take it as his own opinion Which I see blessing but the conversation was well, and why would you cancel it here? Right if you think you're gonna if we think it's gonna cancel later on Why would you delay it here? I guess you know still green gate it have the game go forward but not kill it here And I know I'm asking you to talk about a hypothetical that's pulled from the real news But you can take Haven studios out of it and fair games out of it and compare another game that made it got delayed But still got canceled like why not kill it in the crib right now Right, so it's you're doing that at every point along the way whether it's concept alpha beta, you know All the way down to to gold You're doing a probability calculation And what I mean by that is you have certain levels of return you expect So you're bringing out a new game and you say you know what this game could make a billion dollars But we're only probably 5% likely to get a billion dollars This game could lose 100 million dollars But we're only 10% likely to do that you have a number of scenarios You have a number of probabilities you do that math If it's negative you cancel the game right in that very it's a very simplistic way putting it But you're always doing that evaluation and no there's not like a spreadsheet without actually happening i'm speaking figuratively Of course, that's the idea around scenario planning and you go, okay We feel good.
We don't feel good red light green light And so if you think there's still a chance that you can make it work You continue to green light it because you have so many jobs on the line Of course you have total physical plans on the line your annual operating plans on the line Killing a game is exceptionally painful for all kinds of reasons Including you know not just the game itself but the jobs that are tied to with the people That you want to be exceptionally clear that what you're doing is being done from you know a point of really detailed analysis So long-winded answer. Yeah, you're killing it. You're killing it matt If i can bring it back and if i can bring it back and it's time to take a great time and chat but i want to pull one from chat Francis going to youtube chats is people are being cruel to fair games We haven't even seen gameplay of the game yet. Yes, I know it's a live service But to judge before seeing it wtf I want to answer but kick it to you of like I want to be very clear that i'm not saying fair games is a bad game I'm saying fair games is entering an incredibly crowded market and you're talking about these juggernauts of live service that I just don't see Not even haven jade playstation.
I just don't like what i'm thinking of the probabilities How many games have we seen try to scale this mountain and then be littered with corpses of other games that didn't make it? Am I being cruel? You know that's the that's the exact calculation you have to make but the people that know best about the game or the people making the game And hopefully secondarily the publisher yeah, and you're making those evaluations with that framework But you're doing it with okay, how likely are we to succeed how likely are we to not succeed And you know if they still have enough confidence to keep going like okay, we're gonna give it another year whatever game it is Yeah, let's let's keep going let's um let's see what happens by the next gate And then that's great that means that people believe in it and that's what you want to see But if they don't and they kill it, you know that's not done lightly Um and when you hear about that and people go how could they kill that game that game would be such a great seller and it's like well You know they killed it because it wasn't gonna be or wasn't likely to be and that's like that's the conversations that are happening Cj splits on super chats just like you can be part of the show around youtube.com I'm funny games and says are fortnight and similar black hole games actually harmful okay Fause the thought in the okay Okay, um the two ways of looking at it One way of looking at it are games like fortnite or microfte roblis games that that lasts forever allow people Of all all kinds of people to play them. You don't need to have a lot of money Um, you can play with your friends.
You can build a community like from that perspective the games are great They allow people to you know have a great time and not ask a lot of them if they don't want to But for everyone making new games They're a huge challenge to overcome now because they have such gravity people have invested so many so much time so many dollars Their friends are there like all of the hooks in those games are exceptionally difficult to overcome You have to have a very special game to break out right? Um and people aren't jumping from new game to new game to new game like they were in the past It really takes a special new game to get people to jump in like the mass market Not not everyone in the chat here. You guys are generally playing a lot of stuff But for the mass market consumer, um, you know, am I gonna go spend 70 bucks 60 bucks on this new game? Or am I just gonna hang out with my buddies in fortnite a lot of the times they're picking fortnite of course Yeah, this is you know, it's a classic story for us uh the success of hell divers too Uh, you know, I've been such a fan of the original did not see this coming did not expect this We're here.
We're playing it every day and of course, you know, my 10-year-old nephew jack post-on came and visited And he played he finally got him to play with us after him wanting to stream fortnite with us for so long He started playing hell divers played multiple days with it and then that last day he was like this game so cool I'm like, yeah, are you gonna get your friends to play it? He's like, oh no, they'll never play this what do you mean? He's like, no, they're never gonna play hell divers and that's what you're talking about, right? It's the investment is getting all of your friends on board It's the reason we see things like split fiction, uh, whatever It's like right where you get one person can buy it and at least share it so you can play it that way like There's so many moving parts to this to get someone anywhere else like I was joke about like how hard it is to get anyone in the world to click a link You know, I put out the blue sky put out the post and I'm like Matt's on the show and everybody's like, oh, that's really cool But such a small percentage of them are gonna click the free link to watch the free show versus talking about how you get some go buy these games go play with you Yeah, it's I mean, you can I think everyone's got stories like that personal stories and can relate to this kind of idea But that's like that's what folks that's what folks making games are up against now And that's not the case or where it was 10 years ago Um on the plus side these live service games are keeping people in gaming and engaged on the negative side It's really making it difficult to to break through with something new Is it fair because when I talk about these and I think about this and I'm thinking about Jack and all his friends at school playing fortnight and that's just where they go and they hang out after school Is it fair that like a lot of if not the majority of fortnight live the big live service game players wouldn't play anything else?
Like you know, I mean like the people who are addicted to war zone and play war zone every night like I remember when call of duty was a box game And it was cool. There are gamers who are only buying their Xbox to play call of duty multiplayer They weren't the ones who were like, I'm also gonna try this JRPG. I'm also gonna try this like I would hope the benefit You can tell me if you're seeing any results of this are you bring in a generation like jack you bring in older gamers who play the game for free Maybe they do like that so much that they are encouraged to look at the sort is that just wishful thinking? No, and I think it's one of the things why like when I look at grand theft out of six Um, it's it's not just a benefit for rock star and take two Because that's the kind of game that gets people into consoles, right?
That's the kind of people that's the kind of game that makes people buy a new box and hopefully then you get them buying accessories or they're Subscribing to something or they're picking up some other new games. Um, that's like that's how that works That blockbuster bringing in audience and hopefully they do try some other things and I think that's That's perfectly reasonable and why so many people are looking at grand theft out of six not just for what it can do for Rockstar and take people what it can do for the entire industry whether it will or not I mean who can say at this point? You say that I have a question I want to ask that question, but first I want to remind people about the kind of funny membership Of course you can pick up the kind of funny membership if you love what we do here And 11 person small business making live talk shows about video games all day long pick up a membership over on patreon.com Kind of funny youtube.com Kind of funny games apple or Spotify to get all of our shows ad for you the ability to watch the afternoon podcast like today's interview about Predator lives were recorded and of course your daily dose of mean of log podcast series we call Greg way, but you're not using your membership benefits right now So before we talk about GTA six here's where's my sponsor? This episode is brought to you by built y'all already know I'm a big points and rewards guy But here's a PSA for anyone who rents if you haven't heard of built you're about to thank me earning points on rent is now a reality When you pay your rent through built there's no cost to join built and as a member you will earn valuable points on rent and on your everyday spending Built points can be transferred to your favorite hotels and airlines and even the ones you haven't heard of there are over 500 airlines and 700,000 Hotels and properties around the world you can redeem your build points or points can also be redeemed towards a future rent payment and unique Experiences that only built members can access so if you're not earning points on rent my question is why not start earning points on rent You're already paying by going to join built calm slash kind of funny That's j o i n bi lt dot com slash kind of funny make sure to use our URL so they know we sent you join built calm slash kind of funny To start earning points on your rent payments today.
It's bi lt This episode's brought to you by factor ready to optimize your nutrition this year factor has chef made gourmet meals that make eating well Easy their dietitian approved and ready to heat and eat in two minutes So you can fuel right and feel great no matter what light goes at you Great miller's been loving how simple it is to enjoy his factor meals as he's rushing between shows each day here Kind of funny factor arrives fresh and fully prepared perfect for any active busy lifestyle with 40 options across eight dietary preferences on the menu Each week it's easy to pick meals tailored to your goals choose from preferences like calorie smarts protein plus or keto Multiple people here at kind of funny have been loving their experience with factor and you can too eat smart with factor Get started at factor meals dot com slash factor podcast and use code factor podcast to get 50 off your first box plus free shipping That's code factor podcast at factor meals dot com slash factor podcast to get 50 percent off It's free shipping on your first box. This podcast is brought to you by stash saving and investing can feel impossible But with stash it's not just a reality. It's easy stash isn't just an investing app It's a registered investment advisor that combines automated investing with dependable financial strategies to help you reach your goals faster They'll provide you with personalized advice on what to invest in based on your goals Or if you want to just sit back and watch your money go to work You can opt into their award-winning expert managed portfolio the pick stocks for you Stations helped millions of Americans reach their financial goals and starts at just three dollars per month Don't let your savings sit around make it work harder for you Go to get dot stash dot com slash kind of funny to see how you can receive $25 towards your first stock purchase and to view important disclosures That's get dot stash dot com slash kind of funny paid non-client endorsements not representative of all clients and not guaranteed investment advisor services offer by stash and doesn't tell us see an SEC register advisor investing involves this offer a subject to t and cease And we're back with the one the only executive director and video game industry analyst at sarconna matt piscatella Thank you so much for this matt. This is such an honor to have you here and you're such a good guess i want to know That's very kind right on it is time to talk about the elephant in the room for 2025 maybe 2026 grand theft auto six Talk to me about i mean people understand the game is gonna be big but why is this such a big deal for your job?
So grand theft auto six should be the biggest entertainment launch in us history across anything That's where the expectations set It's one of the things that really breaks through not just into the video game audience but across you know all media You know when we talked to consumer we talked about the time we had a recent Study we did in the fourth quarter asking keep you know what are your expectations for how much you're gonna spend next year what you're gonna buy The nearly a third of the people we talked to cited that, you know, there's a new game this year I want to get and you know grand theft auto six is the one that's doing that a little bit higher percentage about 45 So that there was new hardware this year they wanted to buy so you know switch to It's switched to in gta six and you know this is going to be the two things that really Move the market this year But grand theft auto six is the one that everyone's looking at as being like, okay This is this is the real deal. This is the game that could you know kind of change the momentum we've had over the last couple years So Are you Hopeful we just talked a little bit about it with the fortnight analogy Do you think that that will see that boom that it's going to be gta six drops and people are like oh well I'd never bought the pia during covid. I bought a PlayStation 4. I bought an Xbox series s now I'm going to buy next i'm going to buy a PlayStation 5 is that the kind of hope we're talking about here I think it's an expectation.
Okay, we saw a similar behavior with the a sports college football 25 But you know the best selling sports video game of all time in dollar sales at this point It tripled the launch or the triple the lifetime sales of nc double a football o seven in its launch month Um, you know, so this was a massive hit and actually sold boxes. This is expected to do the same if not a lot more now You know this market's different than it's been in past years I don't think you could take a gta 5 impact on sales of last gen consoles in 2013 and apply it to what's going to happen in 2025 I'm not going to say 26 because I refuse to believe it. Um, you know, but you can take some references there And you know, that's that's the belief and you know when you look at the purchase intent You look at the just how many people are watching trailers and how many people are talking about this game all the time Then you know, it's one of the games that makes you believe I want to know how much you believe we have a question here That's something gets kicked around a lot gary the third superchath and says how much does price point have to do with where we're at is $100 gta 6 even an option Oh that quote um look You don't need to price a game at $100 as a base price What's happened over the last few years our gold edition silver edition's deluxe edition the bloodline edition Let's go wwe. Yeah All of those are driving the launch sales price well above 60 or 70 dollars already And you're not forcing consumers into doing that and they've received absolutely no pushback on it So I don't know could they do it?
It could sure they could do anything they wanted. Um, do they need to I don't think so But here's all right big a little technical. I hope you don't mind Please what we have in this market now is we have a market where especially on the console side It's becoming a little bit older and a little bit more affluent and it hadn't even at the beginning of the pandemic um What we're seeing is that you know People who are a little less affluent a little younger They're choosing things like pc and mobile more than they had in the past These are easy access devices and they're playing games on them that are a little bit more accessible from a cost standpoint It's the older more affluent folks that still have the funds and money available to really invest in these uh, Especially the big console games, especially a launch So what we're seeing is a very strong day one performance for big games at super premium price points Including things like collectors and deluxe and still traditions and all that and then we're seeing extended strength at lower price points But you know the in the time we're going from from the very high price point to the lower price point is compressing Versus what it had been in the past like we're seeing deals more quickly We're seeing price drops more quickly for a lot of titles, but that's not really hurting the overall spend so long-winded way of saying Um that people who are day one buyers are more willing to spend a higher price People who are not day one buyers just have to wait a little while and I think that's kind of what we're going to see Um, but there's gonna be more options for pricing more ways to enter and I think you know We're seeing that already whether that's you know a game starting premium and going to subscription service or you know discounting or price drops Like you're seeing more flexibility in the pricing approach and that's really I think what we're going to continue to see going forward Except for nintendo because they kind of do their own thing of course I want to venture in a little deeper on what you're talking about here with uh household incomes and videoing consoles You had a thread that I really appreciate on valentine's day. It wasn't romantic.
I went this way High income households are becoming a bigger part of the us console hardware market 49 percent of us video game console buyers during q4 2024 had household income at at least 100 000 a year This is a record high being the 48 percent scene in q4 2021 this group accounted for only 29 percent of video game hardware purchases in 20 Well, I'm sorry in q1 2020 you go on 45 plus year old buyers accounted for 45 Percent of the us console purchasers during q4 2024 also record high Under 44 year old buyers made up 55 percent of the console purchasers in the quarter a record low during q1 2020 under 44 Mosel buyers made up 69 percent of purchasers with 31 percent being 45 plus console buyers y'all are getting old But at least you seem to be making more so you have that going for you Which is nice and then I like this end point if any enthusiast board reads any enthusiast board reads this and gets mad for some reason Please know that you are indeed going to live forever and nothing in gaming is ever queen to change from what you want it to be parentheses Which is whatever gaming was when you were 12 you're welcome Well said no, no, that's great. That's what I'm talking about. This is why I love following you on blue sky You have so many great stats and so many little jokes like that about that I That this is great people are making more money in there choosing the right thing console. I love that I'm all that I of course use console.
I just wanted to work I love it for that reason and I love my steamed back and that's a conversation for a different time My question when you look at the stats, you're saying, you know, 49 percent of us video game console buyers doing q4 24 At least $100,000 or more when you're talking about GTA and you're talking about switch to you're talking about the year in general How are you also accounting for what I would call hard times eggs cost a lot gas is still really expensive We're about to tear off the shit out of everything like we're not in a great place with the u.s. Economy and it seems like it's gonna get remarkably worse How do you then bring that into forecasting video games? Uh It's it's become much more difficult to say the least the um the known unknowns are piling up And you know whether you're a fan of this of the administration or not You have to you have to admit that they love chaos. Um, and you know from day to day You never quite know what you're gonna get So, you know, that's part of the bake baked in uncertainty That we're seeing now you're absolutely right things are not great all over We have a basically a split happening where you know the the more affluent the more wealthy you are You know, we're seeing no slowdown and all in their spending there.
They're buying everything And they're buying a lot people on the you know who are not quite as affluent They're being forced to make extremely difficult choices and those choices are getting more difficult all the time Um, what we've seen in the u.s over the last two years is a distinct shift in terms of the number or the percentage of a wallet meaning Um, you know what portion of a person's income is going to different spending areas We're seeing a distinct shift towards food and everyday spending essentials like housing and away from what we call general merchandise categories Which are those areas of discretionary spending things like clothing video games? Um, you know all those beauty products all of those things where you know, you have to make a decision It's not something you have to buy you sure kind of choose or not to and people are putting off purchases of things like apparel Because they're being forced to spend more on things like food. Um, you know, depending on what happens here We could see that really kick in even more which would apply a significant amount of pressure On our categories and could you know really push a lot more people to those free to play easy entry options because you just couldn't afford to do anything else Um, you know, and I don't know what we're gonna. I really don't know what's gonna happen next If anyone does good for you, but um, you know, it's it's it's a little you know, it's a little Scary is probably a fair way to put it.
Um, especially when you look at things like food prices and just need just you know Where the dollars are going? Um, because people are you know, just need to spend there they need to eat of course Yeah, I think you know discretionary spending has always been a concern I remember when covid did pop off and I remember, you know running a business that is so crowdfunded You know, I mean, obviously we do ads we do sponsorships. We do a million appearances and blah blah blah, but it's like patreon getting the membership now on youtube and apple Spotify is such a core pillar of us that for me. I was like, oh man like people are losing jobs.
This is gonna happen blah blah blah Discretionary spending on video games. I thought people would tighten the purse strings right when it was actually the opposite people were home Video games boomed our audience boomed as well because suddenly you didn't have that free time and then we've seen it since then we've already talked On the video game front, you know, okay, then it comes down. We had the ceiling blah blah Same thing with us and so you get into this thing now of like not knowing what the next day is going to bring and what you know Six months from now everybody's bank account looks like is egg still cost a million dollars like you wonder what is going to get cut? And there's a question that went through the chat from Terrence and said Matt Do you think video games are recession proof?
Because this is something people boasted a lot, right? When it was all going south a couple years ago Yeah, I mean Bobby Codex had that back in 2008 and guitar hero was flying high and he said it in a Forbes article and It was it was wrong then and it's wrong now Absolutely not absolutely not and it turned out that guitar hero wasn't either It just happened to hit at the very right time Now is it is the category as susceptible to changes driven by this type of thing as other categories? You could argue not certain areas of spending are certainly going to be hit worse than something like video games Especially for that 16% of the audience that really loves video games like people are going to choose Video games when they want to escape when they want to feel something other than what they're feeling And so that's always going to be there No, not recession proof there we are as a category or as susceptible to changes in the macro environment as any Especially when we're in a market like we are now where Prices are going to start shifting around dramatically perhaps even A significantly and you know, that's going to add shocks to the market and people are going to have to react in the ways they're going to react We're in uncharted territory in a lot of ways Yeah, and you know, we're going to have to see what happens because I don't even know if anyone really fully knows what is going to come down the pipe So, you know, you just have to wait and see and this is what makes this next question impossible to answer So I'm just looking for your prognostication on this one, right? But like with the constant threat of tariffs and this and the other thing that Do you think Nintendo is sweating that with switch to is that something they Will they be willing to eat the cost on and not raise from what the price point they want to do?
Like what do you think about all that? It's tough to say I don't have any, you know, inside knowledge of that Obviously they're doing a lot of work around it as is everyone I talk to publishers and retailers all the time This has come up the price point questions come up a lot. Like where do we price games? How do we react?
Are you know, my advice that I've been giving to publishers is you know, if you're selling a physical good Maybe have you know a little bit more on hand in your warehouse right now than you would normally otherwise have Be sure that you're communicating to folks that you're doing everything you can to maintain availability and you know to maintain a good price point But you know, it's one of those things where everyone's kind of waiting to see what happens You have your scenario plans and you have to react because you just never quite know what's going to happen So I have no idea what they're going to price that I don't know, you know, if they even know at this point because you know a lot of these things are still Happening so it's extremely difficult to say I mean, hopefully it's nothing. Yeah, you know, if it is something and you know, everyone's gonna have forgotten Acer's already announced that they're lifting the prices of their PCs. I'm driven by the the tariffs on the China market And you know, that's just one of those things we're gonna have to ride the wave on a little bit I feel like with This looming threat that no one can really nail down yet. This question becomes Like two timelines, but we're talking about the youth with their tablets their PCs the old like me with our consoles above up A conversation that is continually happening is how much longer will consoles be around when I was at IGN You know, I mean literally 18 years ago.
We were like, oh, well Well, you probably got a ps4 generation and then it's over like what actually we've seen such crazy success throughout one of your blue sky posts PlayStation 5 has been the bright spot for the console business in recent quarters interesting tidbit from today's results in these were from February 13th US accounted for approximately 30% of the ps4 units sales through December 2017 and 33% of the ps5 units sales through December 2024 ps5 is currently 7% ahead of ps4's unit sales price What is your take look prediction on the future of video game consoles? And then of course, I'd love to hear the alternate take of tariffs do roll in and things get crazy Is this a kick in the ass to everybody going digital going every screens in xbox in the same way? It was in 2020 of covid if you just play games on you know, buy a system you're at home. Well, well So if the console market itself has been relatively stable Uh for many years, um, so it goes up and down it's cyclical new consoles come in it goes up consoles get old it goes down it peaked in 2008 2008 Was the year that console hardware sales peaked and ever since then it's been a mature market So, you know what I think is gonna happen pending any Significant shocks to the system.
I think we continue to get new boxes that let people play their shiny new games on their shiny displays I don't think that changes but I do think changes over time is the flexibility of those devices We are seeing diminishing returns on graphical fidelity, you know going from ps1 to ps2 You can sure see it. Oh, yeah, oh from ps4 to ps5 a little bit more difficult except for you know, the sickos in the chat Pixel count digital foundry videos. I need the reflection in my puddles. I need to see the puddles Yeah, um, you know, but generally we're seeing the diminishing returns there So what I think happens is I think you know the steam deck in the switch have provided a, you know path towards You know more hybrid devices devices that can display excellent quality on it on a screen But also be able to take in remote All kinds of different ways of adding flexibility to those devices But I still think people are going to want to hook up a new box to play new games on their new displays Now in the shorter term if we get if deeper sent tariffs I don't see how that doesn't have an impact and where people decide to play at least in the short term You know, but that's an extreme case and you know what we've never seen it before and we don't know what'll happen But you have to imagine People are going to adjust their spending behaviors and their patterns Given significant changes in price like that's just kind of human nature.
I hope we don't see it I really do for all kinds of reasons. Oh, yeah But it would just be it would be unfortunate. I feel like this is in this vein of questioning But we can take away the negative negative part of like what could happen tomorrow when said we'll talk about give me your february 20th 2025 read on xbox game pass and xbox's strategy Like what are we seeing there in terms of growth in terms of success? I have a question about how game pass goes into your whole algorithm, but we'll get to that in a second What right now february 2025 where are we at with xbox game pass from your, you know vantage point?
All right We uh, let me put this in a way that doesn't give me a phone call All right, so the xbox strategy right has been evolving clearly They've been talking about the changes strategy, you know, we went from a game pass first initiative to now a you know We want to provide content to everyone everywhere. That's a pretty significant shift Um, I don't think those changes are anywhere near done. Um, I think what happened So all right, so call it duty black ops six going to game pass was the big that was pushing in all the chips right? That was making the big bet I think the results from that are Are mixed um, we did see an increase in folks subscribing We saw really healthy like fantastic sales on Across platforms um xbox sales for call duty black ops six You could tell a difference because it was available on game pass of course You could but it didn't hurt sales on playstation at all And it didn't really help sell xbox series consoles So a bit of a mixed bag there now There are overall results that they report on the gaming division have been consistently strong despite hardware declining And you know, they're the ones that are most on the bleeding edge of new technologies new ways to play expanding I'm trying to find new avenues.
So in that respect I have a lot of confidence in what they're doing They're doing things that aren't the traditional model. Um, and you know what? Sony's not doing the traditional model either anymore Um, with their expansion into pc and other category But xbox is really kind of leading the way on doing things differently Or simply because they have to um, but partially because there's opportunity there so Um, but one of the things that they have to keep doing is adjusting on the fly because you know, not every idea is going to work Um, you know and trying to find the best way forward through those bumps on the road is kind of how that works So, um cautiously optimistic, but yeah, you know, they might come out with an xbox o west steam deck like device they might come out They better some other crazy thing who the hell knows right? Um, and that could change the dynamic as well So ultimately though, I'm glad that games are getting in front of more people in more places because the consumer of today The game player today demands playing what they want where they want with who they want with whom they want Uh, and you know, forcing people to just go down one road May not be the optimal case for everyone I like that the question came from bj burnardo as youtube super chat bj says great interview guys.
Thank you bj Uh, how does game pass and subscription services affect the internal equation you were talking about earlier in the show? They make gaming a little more accessible It does so Subscription services have been weird They had a pretty nice growth period there in 2021 of course game pass ultimate came around nice little boost there But for several years spending on subscription services was flat There's a percentage of the audience probably a good chunk of other folks in the chat Who subscribed because they are super interested in playing a lot of games a lot of variety Oh, what we found is that that audience is not mass market the mass market audience Don't buy their two games or one or two games a year and play fortnight and be just fine with it We're not interested in a service like, you know, please p s plus extra or gay pass ultimate Now call duty help boost it a little bit, but you know, it's like a 12 percent growth rate Um, and total subscription spending because of it. It wasn't this massive jump Um, you know, so it is a what we're seeing guys subscription services now is a nice supplement To the main offering which is the premium content sold at a, you know sold the premium price or you know Or free to play driven by that on content spend subscriptions a nice to have it's a little bit of an extra Rather than a core selling component of a platform at this point. Excellent Uh matt, you know, I love you and you're a great guest I could talk to you all day long, but I know you have to do real work at some point So I got two questions and then a rapid fire segment and then I'll get you on your way I swear uh motor world hype super chats for question number one and says What would matt say is the number one contributing factor to the inflating cost of making triple a games?
Hmm Uh, so to be honest that side of the equation isn't really my wheelhouse anymore since I left publishing Uh really tough for me to say I think you know the general assumption that the games have become bigger and more complicated required more people Is probably the right direction, but honestly I don't know There I lied there was one other super chat I wanted to get to came from to koda the koda super chat and said any advice for an I'm sorry any advice for an aspiring entertainment media analyst. I have a master's of business analytics and an MBA But i'm struggling to get a response. Thanks Um, I got very lucky. I was pulled in in 2005.
I was working At master foods usa inverting california analyzing dog food sales Um And if you don't know vernan, it's a very industrial part of l Fantastic analyst. There are some folks on places like the install base forum who? Who do absolute wonders with very limited data inputs? Um, so you know when you're when you're talking about the stuff just Look at the earnings reports dig into the data that's available And just keep um keep applying and keep in mind that you know any analytics role that gets you some experience and digging into the numbers Um, you know at some point can be applied to those areas that you're passionate about and I wish you all of the best I don't know if that's good advice.
That's great advice. I think personally great job And my final question before the rapid fire section is this you listen to podcasts You see everybody on social media. What would you say both for pundits like me, but also just the audience of you know People that chat who are talking about games. What's the biggest thing we don't get that you look at?
Oh my god, I can't believe that people don't understand this aspect or this idea You know for the most part that the people I chat with or you know, I listen to Um, you or boss men or some of the other folks that are talking about this stuff a lot like you guys get it A lot of the people I talk to on social media. They get it I think the um what trips people up is and this trips people up across the board in life Is they think that their own sample size of one or their sample size of close friends Are representative of the overall market and then they make assumptions based on what they like as though the entire industry works that way I think that's the one thing that trips people up, you know Have some have empathy put yourself and other people's shoes Think about the things that they might want and the pressures that they might be under And try to help you know, try to understand where someone else I'd be coming from. That's not just you know I'm talking about video games but kind of talking about life Um, but it's the same kind of thing I think which really kind of trips people up when they talk about gaming Excellent. Okay.
I have five rapid fire clear your mind. I say it. You tell me what's going on. Okay.
Yes AI and gaming Oh Um, look AI is being aiming for a very long time incredible tool to be used for development gen AI completely different thing I believe people want to play and experience stories created by people. I don't think uh Having gen ii create a game Well, I don't know this the technology is going to develop but ultimately I think people want to experience stories told by storytellers I guess i'll leave it at that Great answer the future of physical versus digital Uh, you have another 10 years. Okay, nintendo will be the last company really supporting it Um, right now a physical has been in steep decline over the past year Um physical software sales in january hit an all-time january low Um Oh, you know, if you want to have physical games available by physical games because fewer people are doing it PlayStation 5 pro So you know we're talking about the older more affluent console consumer. Yeah perfect bit for that in fact, you know in the uh fourth quarter last year We saw a pretty big spike in that hundred k plus audience So in the third quarter of last year july through september about 35 of console buyers were hundred k plus In the fourth quarter of the holiday quarter it jumped to 49 percent So, you know, I think it that aligns with the psi pro launch It's a um premium device targeted an affluent consumer.
It did its job Uh, and that's that's what it's for. Um, it's not meant to replace the base queue But it's meant to you know increase the price paid if someone's willing to pay it Fantastic. Uh your fourth uh prompt here switch to predictions Um, i'm hoping it's first half I think it'll do well Um, I think the switch outselling the playstation 2 in the united states so far sets an incredibly high bar I don't know that switch 2 will be able to achieve in the current market Although it could get close and cautiously optimistic the uncertainty around price points makes me extremely nervous Um, especially with you know, paris potentially hitting in and around launch Um, a lot of uncertainty in that respect but does nintendo gonna deliver a great product I mean of course I would bet on that every single day So I think it's a great product and and hopefully it finds a great response And your final rapid fire prompt self care self care is great Um, you have so look these are interesting times and uh, you have to control what you can control And you know if entities are muck out around with your personal data You should take steps to protect it if you're feeling stressed out step back manage what you can manage control You control be good to people around you No matter where you are on the political spectrum, um, and hopefully, you know everything will be okay But uh, you know if you get overwhelmed ask for help and it's you know, it's an overwhelming time Matt you are such a ray of sunshine i bring up the self care topic because of course you are awesome on blue sky At giving all the video game stuff and then also just dropping in hey, it's saturday and everything is still off the rails So do some self care wash your sheets they're gross and replace that sad excuse for what it used to be a toothbrush You've been using way too long you're like such a friendly dad dropping advice in the con like oh man It's what I need right now in social media I'm feeling like I don't have kids because I just wanted to, you know, get a job and buy all the games I wanted So i'm gonna be like your pretend old old video game dad. I'm totally okay with that fantastic matt I love you.
Thank you so much for spending so much time with us. Where can people keep up with you? I love you too, Greg and I love your community and all the everything you do and the team does Really all the respect in the world for what everyone there has been able to accomplish Thank you. I'm over on on blue sky I'm not anywhere else because you know one social media sites enough But find me there all the latest results are there always happy to chat and answer questions.
So give me a shout You're the best matt don't be such a stranger. Let's not wait so long. Let's keep you back here whenever you want whenever you got big news Whenever you have big numbers. Come on through.
How about that? I will switch to his launching hopefully soon. So maybe we'll chat then sounds great For now, we're ready. This has been the kind of funny games cast each and every weekday We get together to talk about the biggest topics in gaming whether they be reviews previews or things we need to talk about if you like talking with us Of course, you should watch us live we're live on youtube.com slash kind of funny games twitch.tv slash kind of funny games podcast services around the globe Each and every weekday with a bevy of programs for you to enjoy our programming day Isn't done you got Andy and Nick streaming a vow as part of an individual sponsored stream up next you already got games daily If you're a member which hey, you like this show you like this interview patreon.com slash kind of fun YouTube dot com slash kind of funny games apple and spotify get your kind of funny membership so you can watch in review later this afternoon live So you record it but maybe it's not maybe it's not maybe it's not a man Maybe it's yours from now Remember like subscribe share ring the bell leave a review do everything else you can because again so hard to get people to click that link We need you telling your friends that you enjoyed this content until next time then I'll pleasure to serve you