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00:00 [MUSIC]
00:18 [FOREIGN]
00:28 [FOREIGN]
00:33 >> Hello, Paul.
00:34 Big names for this episode.
00:35 Are you excited?
00:36 >> Yeah, this episode's all over the place.
00:38 Good news, bad news, we've got a bit of everything.
00:40 >> And let's start with Blizzard.
00:42 [MUSIC]
00:45 [FOREIGN]
00:57 >> So after careful consideration,
01:00 Blizzard has made the decision not to
01:02 hold BlizzCon this year in 2024.
01:05 And in 2019, because of the pandemic,
01:07 they turned it into an online format.
01:10 In 2023, we've seen a large audience
01:13 with over 40,000 attendees.
01:16 And this year, it's canceled again.
01:18 So, so many changes happened.
01:20 What are your thoughts?
01:21 >> Yeah, it's been a bit all over the place, BlizzCon.
01:23 But just to give some context,
01:24 BlizzCon's maybe the most important gaming event
01:27 in the history of gaming.
01:29 And I don't say this lightly,
01:30 Blizzard is maybe the most significant company
01:33 in the history of gaming,
01:34 has produced more hits than anyone else.
01:36 And so BlizzCon was a place
01:38 where you came to see Blizzard,
01:40 what was next?
01:42 You're a big fan of World of Warcraft,
01:44 you wanted to see what was next,
01:45 or Diablo, you wanted to see what was next.
01:47 BlizzCon was the place as a fan of Blizzard games
01:49 to come and be a part of that experience.
01:51 I think canceling BlizzCon, it's not surprising.
01:54 And here's why.
01:55 They can give all the excuses they want
01:57 about, you know, tough financial times,
01:59 or we're making layoffs
02:01 so we shouldn't spend money on a conference.
02:03 I get that, it's logical.
02:05 But the reality is, BlizzCon's being canceled
02:08 because Blizzard has been gutted.
02:10 Blizzard is dead, fundamentally,
02:11 as a business, as a company.
02:13 And Blizzard doesn't have anything to announce.
02:15 So why hold an event where you may only be ridiculed
02:18 by your customers, by the gamers
02:20 who used to love you,
02:22 when you have nothing to announce?
02:24 This, I think, is a defensive bet,
02:26 and they're protecting themselves from
02:28 criticism from the outside world.
02:30 And now let's go to Nintendo.
02:32 Nintendo has announced
02:35 that it will announce the new and expected release
02:37 of its Switch device during the current financial year.
02:40 So Nintendo will announce the new release of its Switch
02:43 in the current fiscal year,
02:45 ending in March 2025.
02:47 So we've seen, Paul, the company
02:49 forecast a sharp drop,
02:51 especially in the profit.
02:53 But although Nintendo has sold around
02:55 16 million units of flagship Switch console,
02:57 and the year ended March 24.
02:59 And according to the expectations,
03:02 it's expecting to sell around
03:04 13.5 million consoles
03:06 in March 2025.
03:08 What are your thoughts? Are you excited?
03:10 Yeah, look, this is kind of a good news/bad news story,
03:12 in the sense that
03:14 Nintendo here is saying,
03:16 "We're not even going to announce the next Switch
03:18 until potentially March of 2025."
03:21 So an announcement of the next console
03:24 could be as far as a year away.
03:26 That means the next console
03:28 could be as far as two years away?
03:30 Two and a half years?
03:31 We don't really know how far off
03:33 Switch 2, or whatever it's called,
03:35 is going to be.
03:37 And for both investors and gamers,
03:39 this is a little bit scary.
03:41 And what you see, because all of these companies,
03:43 Nintendo, Sony, Microsoft,
03:45 they're all beholden
03:47 to the console life cycle.
03:49 In other words, a new console comes out,
03:51 people get very excited, they want to buy
03:53 the latest PlayStation or the latest Xbox,
03:55 they rush out to buy it,
03:57 but what happens is, as you get to the end
03:59 of the life cycle, when you know
04:01 the next PlayStation or the next Switch is on the horizon,
04:03 guess what? People stop buying the console.
04:06 They wait. They wait for the next thing
04:08 to come out, because they know it's coming.
04:10 So by announcing this, I think in some ways
04:12 they've killed Switch sales, or at least
04:14 they've shot themselves in the foot a little bit.
04:16 So you're not excited anymore?
04:18 I'm excited for the next Switch, but I wish
04:20 it was this year. And I wish it was a surprise.
04:22 Drop it when the customer doesn't expect.
04:26 Now you're going to have a lot of people who may have
04:28 gone out to buy a Switch, and now they're going to say,
04:30 "Oh no, I'll wait until March of next year.
04:32 Let's see what's next."
04:33 And now let's go to Microsoft.
04:35 Microsoft announced that they're going to shut down
04:38 four studios for video games in the Xbox section
04:41 as part of a wide-ranging strategy
04:44 to reduce costs.
04:46 So Microsoft closed four game studios
04:49 within Xbox, and we call it cost-cutting.
04:52 What do you think about it?
04:53 Look, this was inevitable.
04:55 Microsoft swallowed two huge acquisitions
04:57 in Bethesda, and more recently Activision Blizzard.
05:01 So you've got all these studios with all these people.
05:04 There's no question that at some point
05:06 there will need to be decisions made in terms of
05:08 priorities, focus, where do we put development resources,
05:11 what games do we focus on, and I think Microsoft
05:14 has sort of vetted the studios they have,
05:17 especially with Bethesda, because that acquisition
05:19 closed now quite a long time ago.
05:21 And so they've vetted what they've had,
05:23 and they've decided, "Hey, we're going to close
05:25 these studios down. These games are either not promising
05:28 or not core to our thesis and our strategy,
05:31 and we'll put those resources in places
05:33 where we think they're better fit."
05:34 The question is, in the long term,
05:36 will a refocusing of resources result in better games,
05:39 better experience for the player, and inevitably
05:41 better results for Microsoft?
05:43 And now to another story, but this time from Meta.
05:46 So Meta sold around 900,000 units of AR/VR headsets,
06:06 and we're talking about 440 million in revenues.
06:10 What do you think about it?
06:11 This is a big number for a quarter,
06:13 and it's starting to feel like VR hardware
06:16 is no longer niche.
06:18 When you're selling almost a million units
06:20 of essentially VR and AR hardware,
06:22 now this is getting to be mainstream kind of numbers.
06:25 If you compare, look at what, for example,
06:27 PlayStation sells in the average quarter,
06:29 it's usually three, four million units,
06:32 so yes, it's much larger, but we're getting there
06:35 in terms of VR and AR, and I think Meta's announcement,
06:38 if you remember, we talked about it on a past episode,
06:40 where they're going to open up their operating system
06:43 to other hardware manufacturers.
06:44 So will we see more revenues?
06:45 No question, we're going to see a lot more headsets.
06:47 More headsets will drive more usage,
06:49 more usage will drive more developers,
06:51 more developers will create more games.
06:53 It's a beautiful cycle that I think results
06:56 in eventually VR and AR getting to the mainstream
06:59 in a big way.
07:00 And now let's continue our chat with our guest for today.
07:04 (upbeat music)
07:07 (speaking in foreign language)
07:21 Hello Soukamal, welcome to Game Changers, how are you?
07:30 Awesome, and thanks for having me here.
07:32 Thanks for being with us in Game Changers.
07:34 First of all, let me ask you,
07:35 how significant is the eSports in South Asia?
07:39 Right, South Asia or the Indian subcontinent countries
07:42 arguably has one of the biggest young population
07:46 in the world, right?
07:47 800 million people under the age of 25,
07:49 with let's say half a billion of them playing games
07:52 on PCs and mobile, right?
07:54 And eSports is definitely one of the key experiences
07:57 that this audience really enjoy a lot, right?
08:00 And it is pretty evident in the viewership
08:02 that we see for tier one eSport events.
08:05 Like in a mobile eSport events drop
08:08 to more than like 400,000 peak concurrence,
08:10 while PC events drop more than like 50,000 peak concurrence, right?
08:14 So this basically makes us extremely bullish
08:17 about the future of this market,
08:18 but at the same time, we also have to be very,
08:21 like understanding that this is still a very nation market
08:24 and it is still developing.
08:26 And hopefully in the next four to five years,
08:28 we will see this not just being the best
08:31 or the biggest in terms of gamer base,
08:33 but also in terms of the industry
08:35 as well as the value that this viewership brings to eSports, right?
08:39 Kind of similar to what we are seeing in GCC and MENA as of now.
08:42 And I think both regions are equally in the same time,
08:45 in the same area of like emerging markets
08:47 and we are very bullish about the future of both regions.
08:50 Those numbers are obviously incredibly exciting,
08:52 but let's talk dollars and cents here.
08:54 We've seen eSports go, I think,
08:56 one of two ways from a business model perspective.
08:58 It's either a cost center or a marketing exercise
09:01 for game publishers or developers,
09:03 or there's a future where eSports is really
09:06 financially successful and sustainable on its own.
09:09 What do you think is the future of business models for eSports?
09:13 Which way does it fall or maybe neither?
09:15 Excellent question. I mean, like I love to answer this.
09:17 So essentially right now we see that
09:19 the primary sources of revenue streams for eSports
09:22 are either ticket sales to a certain extent
09:25 or mostly sponsorship, right?
09:27 And one thing that can really elevate eSports,
09:30 like the one thing that we believe
09:32 can lead to exponential growth for the revenue streams
09:35 is creating media value, right?
09:37 And this, I think, is the key for us
09:39 to really unlock the true potential
09:41 for media value in terms of economics.
09:44 And of course, it's easier said than done
09:46 because one of the key criteria for that
09:48 is to have a game that lasts for generations
09:50 so that like, you know, eSports product teams can build,
09:53 fandom can build excitement and those media ROI
09:56 that brands are looking for, right?
09:58 Let's stay on this topic of dollars.
10:00 Obviously, we've seen Saudi Arabia pump
10:02 millions and millions of dollars into eSports,
10:04 put up huge prize money.
10:06 What impact do you think that's going to have
10:08 on eSports regionally and also globally?
10:11 We are living in exciting times.
10:12 I mean, like if you look at the announcement
10:14 and initiatives that have been announced
10:16 by the Saudi government as well as the UAE government,
10:18 super excited because now the spotlight
10:20 is in these regions, right?
10:22 And for the right reasons, right?
10:23 We are a destination and we can open up this region
10:27 for so many experiences, right?
10:29 But a word of caution though here,
10:31 I mean, like, you know, it's easy to go into the bubble mode
10:33 where announcements happen,
10:35 but we need the next five years to really,
10:37 like, you know, work hard with the ecosystem here
10:41 and make sure that these announcements are not one-off,
10:43 but have way more impact than what we are seeing right now.
10:47 And this is the future that I not just believe in
10:50 and I hope to contribute to that future as well.
10:52 So super bullish about that.
10:54 Thank you so much for being with us in Game Changers.
10:56 Thank you so much for having me.
10:58 And with that, we had Soukamal Begou,
11:00 the president of eSports in South Asia at Riot Games.
11:04 We are back with the Q&A segment.
11:17 We have a question on the X, saying,
11:19 "Should schools incorporate video games
11:21 as a learning tool to enhance student engagement?"
11:25 So there is a poll on X.
11:27 It says, "Should schools incorporate video games
11:29 as a learning tool to enhance student engagement?"
11:32 Okay, it's a very controversial topic
11:35 and I'm pretty sure you agree with having video games in schools.
11:39 I do.
11:40 But what about addiction?
11:41 What about the learning process will have to be different?
11:45 It's going to be changed.
11:46 What about parents worrying about their kids?
11:49 It's a very controversial topic
11:50 and that's why we've seen around 50% of people said no.
11:54 See, I think it's not that controversial
11:56 and I'll tell you why, for a few reasons.
11:58 I think, one, and I've said this before,
12:00 many studies have been done that show that kids that play games
12:03 perform better in school.
12:05 Two, we're seeing now games really tailored
12:08 for the education market.
12:09 And the best example, Minecraft for Education,
12:12 which 30 million students,
12:14 almost 30 million students use regularly to learn.
12:17 So it's an environment that they like,
12:19 that they're used to, that they can engage in.
12:21 And third, kids learn through play.
12:24 In fact, all of us learn through play.
12:26 It's the most human form of learning.
12:28 We're brought up in a way that we learn through play.
12:31 It's embedded in our genetics.
12:32 And so games, from a student engagement standpoint,
12:36 there's maybe nothing better.
12:38 But having video games in school and at home,
12:41 it's too much for the kids.
12:42 We're talking about how many hours of playing video games.
12:45 I think it's easy to demonize and villainize video games,
12:49 but history is very consistent.
12:51 These things have been, all new technologies,
12:54 for the most part, have been villainized.
12:56 Now, when I was a kid, they said,
12:58 "Well, you know, we can't give cell phones to kids,
13:00 or we can't give, you know, this kind of technology to kids.
13:03 It's going to ruin them all."
13:04 And now with social media, with video games,
13:06 it's all over the world.
13:07 Now, every eight-year-old has a cell phone.
13:08 And so it's easy to demonize something that's new.
13:11 That's why I'm not surprised 45% are against it or skeptical.
13:16 But eventually those people come around,
13:17 and I think technology marches forward regardless.
13:20 I really enjoyed this episode.
13:22 We covered a lot of interesting big names.
13:24 Do you have any last comment you would like to say?
13:26 I think it'll be interesting to watch
13:29 what happens with Meta and their VR headsets.
13:32 If we end up with episodes and news
13:34 where we're selling millions and millions
13:36 of VR headsets in a quarter...
13:37 We're going to talk about more revenues next episode.
13:39 I'd love to see that future.
13:41 [speaking Arabic]
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14:02 (dramatic music)
14:04 (camera shutter)