GamesBeat: Some things that are on the fringe this year are Apple Watch and Apple TV. Do those play a bigger role in gaming at some point in the coming year?
De Masi: VR is going to be way more interesting for gaming than the watches, no doubt about that. The watch is going to be an extension, whereas VR is going to be an immersive experience.
Apple TV is going slowly. It’s fair to say that the controller has not dazzled people. It leaves a lot of room for improvement. Phones as controllers, in a lot of ways, can be more powerful than a purpose-built controller. We’ve had a game working on Apple TV over Airplay, Eternity Warriors 3, with the phone as a controller. It’s a better experience, in a lot of ways, than a dedicated controller.
GamesBeat: Is augmented reality getting interesting as well?
De Masi: Not as quickly as VR, in my opinion. It’s out there. It’s a topic of conversation. A lot of people like to make comments on one being bigger than the other. But here’s the thing. Game companies and porn companies usually figure out new hardware first. Both of those categories are seeing opportunities in VR in the next three years. It’s not as easy to say that AR is going to get there.
The problem with AR is that it’s only interesting if you wear the headset all the time. We built the first Google Glass game, if you remember. Google Glass has still not shipped. It’s part of that wear-it-all-the-time thing. Putting your goggles on when you’re on the airplane, on the train, kids in the back of the car, that’s a realistic use case. There’s a much higher friction to wearing it all the time.
GamesBeat: We talked about celebrities, but what about more regular folks, like YouTube influencers and Twitch broadcasters and esports players? Do you see these people gathering momentum to become a bigger part of the game industry?
De Masi: That’s possible. Twitch is going to get into video. Video with celebrities is interesting together with VR. Interactive apps, entertainment with VR video, these are things we can push into if we want to.
There was an article in the Wall Street Journal about some YouTube celebrity, a violinist. That game, I don’t think, did shit. They wrote a whole article on this violinist who had maybe a million social followers. I said, “That will never be a big game. A million is not enough.”
I maintain that 100 million social followers is what it takes to be meaningful in today’s discovery environment.
GamesBeat: The question with these people, maybe, is less about whether they’ll be making their own games and more about whether they’re becoming a necessary part of game marketing.
De Masi: People in Hollywood are going to be a bigger part of promoting games. YouTube influencer networks are part of that too, no doubt about that.
GamesBeat: Are you feeling like tablets are hitting a peak?
De Masi: They’re going to be pretty flat. The reality is, phones are getting bigger. You need your tablet for less when your new iPhone 6+ is almost the side of an iPad Mini. It’s heading there. Those are PC replacers. They’re not phone replacers.
GamesBeat: There’s been some talk of an indiepocalypse. We talked about consolidation. Do indie games and game developers get hit pretty hard in the coming year?
De Masi: Indie developers are going to struggle to be viable in a world where scale of bets, scale of marketing, matters a lot more. Indies are going to struggle in a world of high CPIs. Glu is a big beneficiary of high CPIs because we make a fair amount of money off advertising. That keeps us able to distribute our games.
Indies will still distribute. They’ll always have the occasional reasonable success that keeps the dream out there. But it’s increasingly becoming more of a dream, the same way it’s a dream to build a console game. A lot of people had that dream in the ‘80s and ‘90s. How many of them have that dream today? That whole 20-year period in console has been compressed in mobile to 20 quarters. You’re already five years into it going, “Yeah, it’s not viable to be a two-man shop anymore.”
That trend will only continue. Private company valuations are coming down, not only in the so-called unicorn space but in the private sector game space as well.
GamesBeat: How about the top 10 in 2016? Do you think it’s going to change much in mobile as far as the top-grossing list goes?
De Masi: It’s been changing more slowly. Eventually consumer tastes change. There’s no doubt that slot games, match three, and RTS/RPG have done well over the last three years. They do well on the platform. They’ll continue to do well. But there will be some surprising new entrants in the category that do something new. Consumers need to be reinvigorated on their phones for their games.
It will keep changing slowly. The big stay big for longer. That’ll continue to be the case in a scaled market. But I do think consumers eventually get tired of every type of game. That leaves room for renewal. Renewal, right now, is good for Glu. We don’t dominate the top-grossing charts as much as some companies. There’s more opportunity for us.
We’re still the smallest of the big companies, is the way to put it. A $100 million game does a lot for Glu. It doesn’t do anything for King. King concluded that you have to ship a lot of $100 million and $500 million games to keep a $2.5 billion revenue base going. That’s hard to do. But for us a $100 million game is very interesting. A $50 million game shows up on a P&L. If we ever ship a $200 or $250 or $300 million game, that’s a game-changer for us. It’s very possible.