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If the game industry has a thought leader, John Riccitiello is a contender. The chief executive of Unity Technologies has spent a lot of his time in the industry figuring out how to outmaneuver his rivals and predict where the industry is going next.
So he was an ideal speaker at our inaugural GamesBeat Summit, our executive event at the Cavallo Point resort in Sausalito, Calif., last week. I interviewed him onstage and quizzed him about Unity’s mission to “democratize” game development by providing tools such as the Unity 5 game engine that make it simpler to design and publish titles across a series of platforms.
But our conversation went a lot further than that. Riccitiello doesn’t hold back. He drops F-bombs and tells his opinions about who is winning the console wars — a holdover from his tenure as CEO of Electronic Arts.
Riccitiello is tired of Clash of Clans clones, he’s bullish on game developer monetization services, he thinks Sony won the console war with a simple focus on gamers, and he’s looking forward to cool virtual reality apps.
He was full of thoughtful insights, as you can see in this edited transcript of our talk. He’s always one of the sharpest people in the room.
GamesBeat: You recently shipped Unity 5. How did that help in the quest to democratize game development?
John Riccitiello: It did a couple of things. First, we increased the power behind the graphics we can give. Unity 5 was a big step up in terms of shading, lighting systems, and graphical capability over all. With the personal edition of Unity 5 we have a program where developers that are just getting started, with less than $100,000 in revenue, it’s completely free.
In years gone by, we had a much-de-featured version of Unity 5 available for developers getting started, but they really couldn’t make a game for Unity 4, the free version, that was up to professional standards. With Unity 5 they can. It follows through to this point of democratization – putting the most powerful tools in the hands of developers. We have a huge love for new game developers. We want to see them get ahead.
GamesBeat: Democratizing game development was a bold idea. What are your other bold ideas as CEO of Unity?
Riccitiello: I was lucky enough to inherit an amazing company in Unity. People were doing great things long before I got there. We thought about what we bring to the table first — what makes Unity different, our inherent strengths and weaknesses – in terms of setting our agenda.
With Unity, it does start with this idea of principles. The first principle the company was founded upon was solving hard problems so developers don’t have to. The combination of an engine and pushing content on multiple platforms, that’s a hard thing to do. Unity solves that problem. We solve a lot of other problems, but that’s the core problem we solve. Then there’s democratization. From the very beginning, Unity was about putting powerful tools in the hands of developers.
Now, we have more than that in the company. My predecessors did an amazing job. When it came to developing plans going forward, we had to think about what those aspects were. To give you some perspective, in the first quarter of this year, 45,000 different titles were built and launched on Unity. That’s a large number of different kinds of content. That’s an amazing impact on the market. But there’s another impact on the market. In a given month, 1.1 or 1.2 million different developers are creating content on Unity.
You could add up just about every technology company in San Francisco and San Jose and not come up with a million developers. This is a stunning number. But perhaps even more stunning than that, in a given month, just what we see is 700 million or 800 million game downloads every month built on Unity. That’s like a tidal wave. Big companies like Supercell or EA have probably achieved around two billion games downloaded since they got started in mobile several years ago. We do that every quarter. This is a very big impact in the marketplace.
I could give you a lot of other numbers about how important Unity is in the ecosystem. So as far as developing a plan going forward that’s bold—We looked at our culture, what it means to do our job well, and we looked at our ecosystem to figure out how to serve them. I could summarize the bold plan in a couple of ideas. The first is a little discontinuous from Unity’s history. We are investing very heavily to build into Unity the best performance you could possibly have. We’re investing and hiring scores of engineers, the world’s best, to ensure that Unity is a good choice for anybody, whether they’re trying to build a high-end PC game or a 2D game for mobile. We’re pushing that very hard.
That’s discontinuous from where we’ve been. We still want to be usable. We still want to be the quickest thing to throw your game together over the weekend. But we want to capture the performance end of the market in addition to what we’ve been doing.
The second thing that we’re trying to do–This will take a bit of a sideways discussion. I truly believe that yes, it’s awesome to be able to build games on multiple platforms cheaper based on Unity. But one of the problems developers have today is monetizing their games. Finding an audience and getting paid for it, whether it’s through advertising or microtransactions. We have a huge team of people working on the simple thesis that game developers are probably collecting 30 cents on the dollar of what the potential is for their games. We want to get them 100 cents on the dollar.
I don’t have all the programs right now. Some of it’s related to advertising. Some of it’s related to discovery. We’re building new types of analytics tools. We’re going to put a suite of programs together that will help developers to get that extra 70 cents they’re not getting now.
GamesBeat: Apple and Google are going to take their 30 cents of that, though.
Riccitiello: I actually think it’s still a cheaper system than we had before with retail. It’s a much better system than it was as far as the cost structure. But it’s not a system that allows developers to get what they need to float their own ecosystem. The vast majority of independent developers today lose money. Many major publishers, too many of their titles lose money because they’re not able to get the monetization right. If someone doesn’t solve that problem, our ecosystem isn’t going to fill rooms like this someday. We need to solve monetization.
The third thing we’re doing, something that’s near and dear to my heart, it’s more platforms. When we launched Unity 5, we talked about 21 separate platforms. We’re doing pioneering research around AR, VR, some new ideas around console, WebGL, some things we think are going to define the future of gaming and the future of entertainment. These days, with AR and VR—Certainly the lion’s share of revenue built from those platforms is built on Unity. We want to build better tools for content authoring and content deployment on platforms like that.
It’s going to be different from creating a traditional 3D game. We want to push the envelope, so that the tools we create enable developers to create experiences we haven’t imagined yet.
GamesBeat: You guys are a kind of meta-platform. Platform wars are always happening. What’s your view of how you make sure that you’re not on the losing end of those?
Riccitiello: Look at this from a developer’s perspective. They say consoles are going away. Then they say, just imagine, we’re going to have a CPU and GPU in a tablet that’s every bit as powerful as an Xbox One, and it’ll have a controller and you’ll look at it on your TV. From a developer’s perspective that’s a console. What’s happening going forward, you have AR and VR content. You have big experiences you put on your television. There’s going to be all of these things.
One of the challenges is, from a technology perspective, we intellectually want to believe that we’re all pitching to one platform. It’s all a CPU and a GPU and a touch interface or a console. The reality is, the tools that underlie technology, what we use for iOS and Android, you’re going to use for a Samsung smart TV, for HoloLens, for whatever it is. These are often very vertical, closed systems. Each has its own set of tools, its own business systems and so on. What Unity does is we cut across that. Build once, deploy multiple times. If you want to tune for mobile or tune for high-end PC, you’re going to have to mess around with things like how lighting works, unless you want your mobile game to run at three frames per second. But essentially we’re trying to create the tools to build once and deploy everywhere. Simplifying that platform complexity dramatically and increasing the monetization opportunity dramatically.
GamesBeat: Now that you’re inside Unity you get to see some very interesting analytics about what’s being built out there. Have you seen the 200 Clash of Clans clones that are coming?
Riccitiello: Just go to any one of these conferences and someone will pull you aside and show you a thing in their coat. It’s invariably a Clash of Clans clone.
There are examples of games at the very top of the chart where they literally took somebody else’s game and polished it and improved on it in a small way. I won’t talk about what fell upon Bejeweled, for example. That level of execution is to be admired anywhere. In the execution there is art. But ultimately, it’s demoralizing to see the level of copying that’s typical in game development.
It’s the easiest path. I understand why people do it. But mobile has barely scratched the surface around opportunity. Console desperately needs reinvention. We’re playing the same games since the advent of 3D gaming in 1995 and 1996. So many of the mechanics are exactly the same. There’s some innovation. But there’s not enough. There’s too much, “I’m going to make that game, but a little bit more this way or that way.” Maybe you can have five candies connect instead of three? It doesn’t seem like enough.
GamesBeat: You came onstage at a previous GamesBeat talking about your predictions on the console war. It looks like Sony’s on top now. What’s your postmortem on the current console war?
Riccitiello: It’s one of the more distressing stories in the last several years. There was a clash of ideas that separated Sony and Microsoft in this generation. It frustrated me so much that I actually wrote an article for Kotaku about it, which is not my backyard. But it was this: They actually had very similar architecture in what they were trying to bring to the table.
Microsoft focused on the entertainment marketplace. What gamer do you know thought Kinect was very interesting for much of anything? They focused on entertainment beyond gaming – the way they positioned it, the way they talked about it. All the rules they put together, what people thought of as DRM, they described an entertainment ecosystem. It was as if Microsoft was trying to be big in the way that Apple has become big or Google has become big. It didn’t feel like gaming was big enough to justify the pent-up desire at Microsoft to have the reputation they wanted as an innovator.
Sony just said, we’re making the best fucking game platform we can. Pretty simple. Partly because they didn’t have the resources to do more, but they cared about the gamer. The metaphor might be a game of pool. Microsoft was focused on the shot after the one they needed to make, but they missed the first shot and never got to take it. Sony worried about the shot they needed to make, to win the hearts and minds of gamers. They did a better job of execution with that.
Is the broad scope of entertainment a bigger idea? Yeah, but not with an unfocused execution. A tight execution on 50 million people who matter, the people who aren’t giving up consoles—All the data pointed to it. Sony nailed it. They deserved the victory. They paid more respect to our community than the other guys.
GamesBeat: What would you hope happens next in this console generation, leading up to whatever’s going to come with Nintendo and DeNA?
Riccitiello: It’s exceptionally unlikely, given how far this has been laid out, that we’ll see a reversal on the relative success of the individual consoles, at least in my experience. Other than the Nintendo Wii going up and down a bit more quickly than we all thought. These things are usually four- and five-year patterns.
Right now, like a lot of folks, one thing that feels like the next big thing is AR and VR. I want to pick up on a point Nolan made about Microsoft’s cost problem. I want to also touch back to this scenario about the $150 billion AR market in 2020. I’d say that it’s way too early to know what experiences are going to work in AR and VR. I’ve tried as much as anybody. I’ve been involved in this stuff. I personally don’t think I’ve gotten into an experience that’s close to what these things will provide. Somebody is going to innovate. 90 percent of what I’m seeing is almost a port of something being pushed to these platforms. There’s a lot more innovation to come.
Almost all the big sexy stuff we imagine takes a PC to run, and not a PC like your laptop or even a high-end Alienware. It takes a PC that’s water-cooled in a custom case. It takes a lot of energy and a lot of money to get that processing power. To process the experiences we want, we’re talking a couple thousand dollars for the box. Unlike mobile, which took off like a rocket with a model around carrier-subsidized hardware that’s relatively expensive, this is going to follow some patterns that are more like DVD starting as a thousand-dollar box and taking years to get to that $100-$200 price point where it became a mass-market item.
This is going to be as revolutionary as we think it is, but it’s going to be slow. It’s going to require hardware that none of us own right now. All of us are picturing buying an Oculus and plugging it into our Mac laptop. You can do that, but it’s not going to get you what you want. None of these boxes are going to get you what you want. What we all envision is going to take more money and more time. I’d take that market prognostication and smooth it out over a few more years for that cost curve to come down.
GamesBeat: Mark Pincus got into a great deal of trouble when he said he was bored with games. I hope you’re not going in that direction.
Riccitiello: I’ve said many times that I’m bored with certain games. I’m bored with mimics, bored with copies. Who isn’t? Who doesn’t admire the one in a thousand that executes so well that it works fine? I’m all for that.
Question: What are you most excited about in terms of what’s coming in AR and VR?
Riccitiello: Honestly, it’s two different experiences. With VR, [Oculus CEO] Brendan Iribe coined this term about presence. What he means by that, you put the headset on and you feel like you’re someplace else. It is convincing. When you look down, you know you’re going to die if you take a step forward. That’s such a powerful experience. We’ve all had three minutes of it. The question is, what do we do with an hour or two hours of it? We don’t know the answer to that.
Then you have the exact opposite. We’ve seen data on how big AR might be. Remember the Star Wars movie where the Jedi council are all sitting around the holograms? We’re going to have that. We’re not going to have something exactly like it. We’ll all have to get over seeing everyone’s faces with glasses on them. But I hope my children move away just so I can come back as a hologram while they sit around the table. If I can do that in my lifetime, I want to. There will be some experiences that will be pretty transformational.
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