a16z Podcast

The Social Serendipity of Cloud Gaming

Jade Raymond, Jonathan Lai, and Lauren Murrow

Posted November 16, 2020

Social Strikes Back is a series exploring the next generation of social networks and how they’re shaping the future of consumer tech. See more at a16z.com/social-strikes-back.

True cloud-native games—those exclusive to and solely playable within the cloud—are poised to revolutionize gameplay and unlock new avenues of hyper-personalized storytelling and socializing. It’s a vision that, though steadily advancing, is still in its early stages. Just one year ago this week, Google launched its cloud gaming service, Stadia, which shares the space with competitors including Microsoft’s xCloud, Playstation Now, and Nvidia’s GeForce.

In this episode, Jade Raymond, VP of Stadia Games and Entertainment, a16z partner Jonathan Lai—formerly of Riot Games and Tencent—and host Lauren Murrow talk about the challenges in building cloud-native games, their potential to upend prevailing business models and pricing, and, most importantly, the spontaneous, social, super-shareable experiences that true cloud streaming will reveal. Through the rise of user-generated content, AI, and the cloud, Jade and Jonathan believe we’re inching ever closer to the Metaverse.


Jade Raymond, VP of Stadia Games: I always knew I wanted to make games. I figured it out when I was about 12 years old. I was visiting my uncle, who lived in San Francisco at the time. And I made it my mission to beat him at all of his games before I left for the visit. And it was during that time that it dawned on me that someone gets to make games. And I thought, that’s awesome; why not me? I had already been into robotics and done a little bit of programming. But that’s when I really decided to focus on that as a career and started working on game projects in my spare time.

Lauren Murrow, a16z: So how does building for cloud differ from what you’ve done before?

Jade: I’ve always been attracted by the bleeding edge of games. Games are constantly reinvented. If you look at what a video game was 10 years ago, it was totally different, 20 years ago. What drew me to working on the “Assassin’s Creed” franchise and building that up was that next-gen consoles were coming. And that was a big opportunity to go, okay, what can we do with 8X the processing power? And so a lot of those questions that have pushed me towards my career decisions all along is what attracted me to Google this time. Which is: okay, it’s not 8X, it’s the whole data center as your processing power. Okay, it’s the whole model for how we think about client server and multiplayer games needing to work is totally upended and changed.

Lauren: Some of the largest games today—”Fortnite,” “Clash of Clans”—run most of their network on the cloud. So Jon, what distinguishes what we have now from true cloud streaming or what you call cloud-native gaming?

Jon Lai, a16z partner: The first wave, which is what we’re seeing right now, looks like it’s mostly been ports of existing PC and console titles. And so, taking a title that’s already under development for the Playstation4, the Xbox One and then distributing it in the cloud. But these games were fundamentally developed for a different hardware platform. And so we’re most excited about this second wave of games that might be coming around the corner. We call them cloud-native games, but what they really are is any game that’s built from the ground up for the cloud that’s only playable within a cloud infrastructure, as opposed to something that was just ported.

Jade: We are currently in the first wave of cloud gaming. And really what we’re seeing is the convenience of cloud gaming. What we’re seeing is, okay, it’s all the games that we can play in other places, but we get rid of the download time. We can play more instantly. We don’t have to worry about updates. We can play on different screens. Those are great benefits, but I think the really exciting thing, what’s going to be the equivalent of what TV was to radio, is when we unlock what the second wave of cloud gaming is.

One of the things is, obviously, the whole client server model. Right now, you’re limited to the interactions and simulations that can run locally on people’s machines. Even if “Fortnite” and a lot of other games are running on the cloud on the backend, they’re still designed with the idea that they have to run on a local PC or a local console or a local mobile device, in some cases.

And really what’s going to unlock it is not only the processing power and what we call elastic compute of the data center, but also the idea that essentially, any game can be designed like one big LAN party. So you don’t have to worry about network ping times. You can at least know exactly what those are and design for them and measure them in a consistent way. And also that hits up against the limit of how big of a shared experience you can have.

Lauren: Are there new game mechanics, or even game genres, that you find uniquely enabled through the cloud? Jon, you’ve written about how it might help solve games “cold start” problem. But what are some of the other mechanics that you see enabled by cloud gaming?

Jade: When you think about the magic of cloud gaming, you’re being sent a stream that—from the pipes and stuff—looks exactly like a stream of video data. When you think about this new paradigm, there can be a one to infinite and very strange connection of what inputs impact that stream. So if you think about it, someone typing in the side of a YouTube chat can have an input into my environment. They type tomato, tomatoes start falling from the sky in my game. Thousands of people connected to my game could be there playing the role of, let’s say, a zombie horde that’s attacking. Those all could be real players, right? And their input could just be on a mobile phone in a very simple interface for doing that. Because to be a zombie, you don’t need so many controls. [laughs] I think a lot of the really exciting things that disassociation of the direct relationship between number of people connected to client, either one or X8 or whatever—one hundred is typically the biggest we’ve seen—and this way that tons of inputs can impact the simulation live.

Jon: I love that idea. I think there’s always been something magical in the combination of live video and games. You have this Twitch Plays series where someone will play a game on Twitch, except the people playing it are actually the Twitch audience. It started off with Pokemon and it’s gone through several games. But it’s essentially crowd-sourced game playing. And then recently you’ve had these things like Netflix “Bandersnatch.” People have experimented with making interactive, choose-your-own-adventure stories so that the whole family can play and debate over, like, whether you go left or right, or if the protagonist should, like, kiss the girl or not. So I think there’s something magical about that kind of combination of live video and games.

I would love to figure out: what does a next generation “American Idol” look like, where you have millions of people all watching the same stream that are voting or typing or doing something to affect the show? Because I feel like there’s something there that we haven’t seen yet that could be pretty compelling.

And then even things like “Among Us,” which is so, so popular right now. I’ve often wondered: is there a way for that to be more interactive between the people that are watching? Because it’s a big live streaming phenomenon. So, for example, imagine an “Among Us” game where the audience actually voted on who the imposter was. And it becomes the player’s job to try to act and convince the live streaming audience that they’re not the imposter and this other person is. It becomes, like, 50 percent D&D, 25 percent game, and 25 percent reality TV show.

Lauren: On that note, what are some new business models that you would expect cloud gaming to enable? One area I’m interested in, in particular, is how it might set the new stage for even new forms of marketing.

Jade: I’m sort of obsessed with the idea of bringing back arcades, or the arcade experience, now that cloud gaming is here. Because really, you don’t have to pay for a whole game anymore. So even with this first wave, there’s an opportunity to say, “Well, maybe, I buy a bunch of coins like I did in the arcade. And I play 10 minutes of this and then I hop to the next. And my coins go to the next experience.” I think there’s a whole bunch of interesting ways to think about that opening up games, as well, to all kinds of communities that maybe can’t afford the $70 or didn’t get to play AAA games, right? And then you could also create business models that could be those coins, you buy them or they’re ad-subsidized.

So I feel there’s a ton of opportunities not only in business models, but also how you think about recommendation systems. Like, imagine we’re in a crew and we wanted to get a high-impact bunch of combat, like we wanted some melee combat kind of action. You could imagine making a playlist of 100 different games with the highlights of all the best melee Boss battle parts. And as a little group, we could sort of teleport from game experience to game experience. So there’s a whole lot we can do in terms of delivery, recommendation, and business models.

Lauren: Do you think game companies and developers will also have to figure out new pricing models, with this paradigm shift?

Jade: We’re seeing a big shift towards subscription. There’s been an ongoing shift towards free-to-play in games. And then I think, you know, there are the new crazy ideas that I had for more traditional box products of: how can we bring back the arcade? Can we bring back micro payments? Can we bring back ad revenue?

I think also, though, if we’re talking about the Metaverse vision, then what’s the marketplace? Is there a global marketplace for all of these experiences that people can tap into? Is there a kind of eBay for virtual stuff? And can that virtually move back and forth between the different experiences? Is there an API or a standard so that stuff can move around between these experiences?

Jon: The interesting thing is there are historical precedents for all these pricing models. What keeps me up at night is trying to figure out: Are there new pricing models that we haven’t seen yet that are possible within a cloud gaming ecosystem that actually make more sense than any of those models? Because subscriptions made sense in a legacy world. Free-to-play made sense in mobile, for example. These are all things that worked in other platforms.

But is there something that leverages the blockchain, for example? If there was a marketplace of goods that people were trading and every good is uniquely identifiable and there’s a limited supply of them, then you essentially create virtual economies inside of these games and these worlds.

And so then the pricing models become actually more like real life. People might have jobs inside these games. They might be trading their time; time becomes a new currency. It feels like we’re still scratching the surface when we just think of subscriptions and free-to-play and a la carte. Because that’s what worked in the old world. It might not be the thing that takes off in the next wave of cloud-native games.

Jade: Yeah, when I look around it does seem like everyone, Stadia included, is currently focused on being the “Netflix of gaming,” with a model of some form of subscription. And I think that’s great. But I think the real killer app for gaming, and cloud gaming in particular, is becoming the “YouTube of gaming.”

I think if you look at what I believe the history of the internet is, we had the internet of text. Now there’s the internet of video, and obviously TikTok is one of the latest examples. Kids go to YouTube to search now, rather than other search engines. They’d rather watch a 10-minute video than read a two-minute text. That’s the way people process now.

I think the future is the internet of experiences. And I do think that cloud-native gaming—and something like the vision of the YouTube of gaming—is going to enable that internet of experiences.

Jon: In this environment where people can just click to play, do you think that fundamentally changes the types of games that we’ll have? Might the design playbook also change to accommodate people being able to come in and out of games much more easily?

Jade: Absolutely. What we started to see in game development vocabulary is “time to fun” becoming an important thing. It used to be fine to have these really long intros and cut scenes and then make people go through all of this character customization before they even knew what they were customizing the character for. And I think the new best practice—and it’s not so new because we’ve been talking about this now probably for the last five to 10 years—is how do we shorten that “time to fun.” And with this instant play and with click to pay, that’s going to become more and more important.

Jon: And instant games also seems to be on the verge of having a comeback, the concept of HTML5 browser games. There are a bunch of IO games that have recently reached hundreds of millions of people playing. And this has been around for quite some time, right? You have things like Slither.io, that snake game where you’re trying to eat other snakes in a browser.

But it feels like today there are so many social channels that are virally propagating these links. So you have people sharing on Discord, you have people sharing YouTube. Things are going viral over at Twitter and Reddit. And so instant games seem to be adjacent to cloud gaming, and maybe they merge in some way.

Jade: I’ve thought about the same thing, and I think that’s evidence of the appeal of cloud gaming and instant access. Because that “time to fun” metric is so important. So how do we now deliver that for the HD experience? Really thinking about different entry points and scaling those for different people.

Lauren: You mentioned that you’re experimenting with click to play. The [cloud gaming] space, of course, is growing increasingly competitive. You’ve got PlayStation Now, you’ve got GeForce, Microsoft xCloud. What is it that makes Google Stadia particularly equipped to be out in front of the cloud gaming trend?

Jade: Think about the Google Assistant. I don’t know if you’ve had this experience, but it was quite an experience for me. I was with my mom hanging out in L.A. I looked up a place to go have sushi on Google and I hit what I thought was the reservation interface. And when we got to the restaurant the person there said, “Oh, where’s your father?” And I was like, ‘What are you talking about?’ because it was just me and my mom. “Oh, the really nice man who made the reservation.” And then I realized that Google Assistant made the reservation for us. And it was such a natural and friendly conversation that the person who took the reservation didn’t realize it.

And that kind of power inside a game character just unlocks a whole new level of immersion and storytelling that’s really exciting. I mean, I love that about MMOs. Obviously, a lot of my work has been in action/adventure games where story is a big part of it. And so to unlock that storytelling capacity and realistic, believable characters is just super exciting for game developers.

Lauren: Talk to me about how that unlocks this next level storytelling. How does it differ from the current crop of worldbuilding games?

Jade: Typically, when you go talk to NPCs in games—non-player characters—there’s a certain set of canned answers or things that that character will be able to say. And that’s limited by how many options a writer can write in terms of believable script, and then how many lines you can record with an actor. All of those things have limits. So the experience that you have as a gamer is, the characters that you encounter will often repeat the same things multiple times, if you go back. There’s no adjustment to those things.

And so with these AI models that we have, we could put some basic objectives and behaviors inside the AI models. Then they could respond to things that you’ve done in a game in a realistic way.

Jon: as you were saying that, I was thinking of “Assassin’s Creed.” And you know how in the “Assassin’s Creed” world you have so many NPCs milling around. The concept of having each of those NPCs controlled by an AI that remembers what the last thing you did was, the last time you’ve spoken with them. Maybe they’ve heard of things that you’ve done in far-off cities from their neighbors and they react dynamically. That feels really mind-blowing in terms of the next evolution of these virtual worlds or these open-world games. And it makes complete sense, in terms of making the user experiences more lifelike. If you robbed a store last week, and then you come back inside that store today, well, people should react differently to you, right? [laughs] Like, they’d be scared of you, maybe…

Jade: Absolutely. Even better, a wanted poster of you should be on the wall. [laughs]

Jon: Right. That way the world feels dynamic. It’s reacting to things that you do. It’s not that dissimilar from “Westworld,” for example, that HBO show where you come in and everything adapts to the choices that you make as a character.

Jade: I think that’s one of the ultimate dreams, creating that kind of experience. And we’re on the verge of being able to do that kind of thing. We certainly are there in terms of graphics fidelity. And those are the types of things that wave two of cloud gaming unlocks. You can have distributed physics across the cloud, so there’s no more limitations on how that behaves. That creates a ton of immersion game play, but also just dynamic weather and the persistence in a world and having that kind of recognition. I don’t know if you remember the Nemesis system that was introduced a few years ago and was hugely popular. We can imagine what’s the next-gen version of a Nemesis system, where there is memory from all kinds of characters and we take the limits off of that, as well.

Lauren: I want to talk about using AI not only as a creation tool, but also in terms of identity. How does AI also enable you to more fully express yourself within these game worlds?

Jade: We’re in the age of self-expression. Whether we’re talking about a game as a social platform or traditional social platforms, we’re all about sharing something about ourselves. We all want to show who we are with the world and get recognition for that. Even if you think about the trends in fashion, people want to go to Nike to design their own shoes. Everyone wants to put their stamp on things.

And so I really think the more that we can create these tools that help people express themselves and share something about themselves, the stronger and more sticky and more enriching, really, that interaction is going be.

And I think there were the beginnings of this when you think about “Left 4 Dead” and the AI director pacing the game and understanding what makes a game fun, and the ups and downs. Well, what can we do in terms of AI directors on a global scale to create that fun and to personalize that, as well? So maybe my version of a great game is action, action, action all the time. And maybe Jonathan prefers to grow some vegetables or whatever and go collect some ore and craft. I don’t know what kind of player you are. [laughs] The AI director could personalize that as well.

Jon: To your point, if you’re watched the movie “Iron Man,” I’ve always thought that what was the best part—the most valuable asset—is not the Iron Man suit, it’s actually J.A.R.V.I.S, the AI, which helps Tony Stark create that suit. Because in that movie Tony just tells J.A.R.V.I.S the design that he wants, right? It’s like, “Hey, I want a suit that’s made of titanium, and put the flux capacitors in the wrists.” And then J.A.R.V.I.S figures out how to actually make it. He goes and gets the materials and 3D builds it.

And so having J.A.R.V.I.S in our world—some set of AI assistants or set of creator tools so someone can just focus on what they want—would be game-changing in terms of enabling storytellers to spend more time being creative, thinking about design, versus the minutia of implementation. It’s where the bulk of time and money goes right now in game development, as opposed to that early brainstorming design and conception phase.

Jade: And then how do we use AI to amplify the talents that players have. So maybe I’m not great at drawing or painting or I don’t know how to 3D model or program. But through natural language processing, I can describe what I want and we can use machine learning to create the 3D rendition of that and amplify what I said. I think that would be an incredibly fulfilling experience and a way for people to share who they are beyond just avatars. They could really create a whole environment that represents them that they can share with people.

Jon: I think it’s the ultimate form of the demonetization of content creation—the idea that anyone can become a creator with the help of the AI or a suite of AI assistance tools. And I think it also might be a requirement for building something like the “YouTube for gaming,” because in order to have enough of a content library, you need more creators out there than just a number of full-time professional developers making these games inside big companies.

Lauren: Yeah, talking about some of the challenges of building cloud-native games, it takes a really long time and it’s really expensive to build out some of these content libraries, right? So is the answer to that the concurrent rise of user-generated content and AI?

Jade: I do think so. Ultimately, I think that’s how we’re going to get the best content, as well.

Jon: Maybe that’s actually the path to the Metaverse that people talk about but it happens piecemeal, with everyone creating content as opposed to any one single company creating this huge, virtual world that people go in. It’s actually the entire world working together with an AI to create that Metaverse.

Jade: And when we’re talking about the killer feature of cloud-native, the fact that we’re landing on UGC as being a big part of it is really key here. Not only because people want to express themselves and share an identity. But also, from a technical standpoint that’s something that really hasn’t been possible before. Because how do you constantly update a world? How do you keep things updated? I’ve created my part, and then how is that reflected in your game if I want to share it? So all of this happening on the cloud makes those things that weren’t possible before, especially on mobile, to be shared experiences and shared worlds.

Lauren: So what are some of the social capabilities that the cloud enables that we haven’t seen yet? What does that look like?

Jon: It feels like when people think about social in cloud gaming, the first thing that they gravitate toward is the removal of concurrency caps on player accounts with multiplayer games. And so, just using Fortnite as an example, Fortnite is a cutting-edge piece of software, but it’s still limited to just 100 players in an instance. A lot of that’s just limited by what your client-side processing is capable of keeping track and of and rendering.

And so a lot of folks are excited about cloud gaming because they think, “Oh, well, what if you had thousand-person battle royale or a one-million-person battle royale that took place over days, if not weeks? And so this feels like the first iteration of what folks think of when they think of next-gen social in cloud gaming.

Lauren: Should it be that big? Should we be having 1,000-person battle royales?

Jade: I’m not convinced that thousand-person battle royales are going to be the best thing. I think an MMO could be a place where the more people, the better.

So I’m going get into a bit of theory here about network design, because this is really where I see the best answer to your question. If you think about a network where people are the nodes and the links between a network are the interactions. Typically in network theory, networks with a lot of weak links grow much bigger. So for example, that’s why you’ll have more people following you on a Twitter than a Facebook. Those are much lighter ways to interact. And so when we think about cloud gaming and designing the IPs of the future, I think it’s leveraging all of those different types of interactions. So we talked about a lot of very deep links of interaction, right? That’s me creating my own world where other people come join me. That’s a very involved thing. Then let’s say we’re making a shooter game. Actually being the person who has a controller or is playing on mouse and keyboard, that’s also a pretty deep connection. On the other end of it, you have the watchers who are now, for the most part, even with live streaming, disconnected. Sometimes there’s chatting and impacting it. But that’s a light connection. We’re starting to see, only through the text, the impact bleeding through.

And I think cloud gaming wave two opens up that full spectrum of interaction, which means that you can really grow an IP or a platform or a social network to be a much more powerful network because you can enable those light ways of interaction.

Lauren: So what is the benefit of that lighter touch?

Jade: It’s accessibility. It’s accommodating different ways of play for different moods, as well. Probably when I’ve carved out two hours to be in front of my TV and I really want to be immersed, I’m looking for one experience. When I’m on my phone standing in line somewhere, I want a different type of experience.

So it’s both to address mood, but also accessibility. I think a good example of this is when you think about the “Star Wars” franchise. It’s a great model of an IP that’s an entertainment network. Because I can just get a little Yoda sticker, and I’m somehow involved. But that’s a very lightweight way to be involved, right? [laughs] All the way to: I can be creating fan fiction within the franchise.

Ultimately, the benefit of that for players is that I can feel included no matter what my device is, my skill level, my time availability. I can participate. I don’t have to feel like I’m left out from my friends who are gaming or left out of the experience. And I think from the point of view of creators, you can reach a lot more people and create much more rich experiences.

Jon: Regardless of what device you’re on, what mood you’re in, your game play experience should be able to adapt to your personal setting and your desires and moods and device. And I think that’s only made possible with something like a cloud-native game that lives in the internet that has access to all of the data on you, where you are, what device you’re on. If you combine that with something like the AI director, that ensures that everyone has their own personal journey when they’re entering a world or a game and that it’s a good experience, as well.

Jade: I also read your article talking about people coming back to play D&D. You know, there aren’t very many great DMs in the world. And maybe that limits the amount of people who can enjoy that kind of story. So that’s something that an AI director could be taught to do and learn. And actually, we could probably through ML create the best DMs on the planet, right? They could learn what’s most entertaining, what makes a great story, and how to react on the fly to people’s reactions.

Jon: If that could be crowd-sourced somehow, I think it opens up the audience way, way, way more massively than it is now, where you actually have to find someone to physically come over and DM the game.

Jade: Yeah, and what you’re talking about really is also the magic that makes that experience personal and worth sharing. And “worth sharing” is a term that we use a lot as a guiding direction with our game dev teams. Either sharing in the moment with multiple people, or it’s so personal and so unique that it’s worth sharing even if it’s a single player experience. Because if my version of the experience is exactly yours then there’s no point in me sharing it with you. You’re going to say, “Yeah, I got through that level.” Maybe it was slightly different, but it’s more or less the same. The more we can enable these experiences, the more personal they are to you, therefore more meaningful and more engaging. But also the more they’re worth sharing.

Jon: One of the unique things about video games, as well, is that it’s one of the only forms of entertainment that dynamically generates video as it’s consumed. If you listen to music, that’s not the case. If you read a book, that’s not the case. You’re just consuming it. But with video games, the act of playing it generates clips that can be shared virally over Reddit and Twitch and YouTube and so on. And so this is really leaning into the unique strength of the medium as a video generator as well, which, to your point, is immensely shareable.

Jade: And then all kinds of things can have different effects on that video generation. Which means that my particular experience is not only me and personalized, but the moment in time and how everyone else interacted with it then too.

Lauren: Do you feel that that unlocks more interactivity between players who haven’t interacted before? Does it open up the experience to more spontaneous interactions among strangers, as it becomes bigger and as it becomes more open?

John: If you think about how we actually socialize in the real world, pre-pandemic, it’s common for you to just say to a friend, “Hey, let’s meet up at a bar or at a shopping mall.” And you meet up with them and you don’t necessarily have this agenda that’s planned out, right? It’s more like: we’re gonna meet up at the mall and then we’re just going to hang out and wander around. Maybe we’ll meet some people and then we’ll go home in time for dinner.

What is the digital equivalent of that? People point to video games, but the reality is that most video games today are very purposeful. It’s like, I will call you up in Discord and say, “Hey, let’s go play ‘Baldur’s Gate 3.’” And then we’ll meet up and then we’ll play Baldur’s Gate 3 for two hours and then we’ll adjourn. In a cloud-native gaming world, is it possible to have the dominant social modality actually shift closer to what it’s like in the real world? Where I’m just saying to you, “Jade, let’s go to XYZ place”—that YouTube of games, for example. And then we’ll just wander, but it’s not planned out. It’s not purposeful.

Jade: I think that’s the vision of the Metaverse that many of us have been wanting to see coming for years. I actually was at a startup in 2000 that was trying to make the Metaverse back in the first dot com boom. [laughs] It is one of those things that you can finally see happening now with cloud gaming

You don’t have to worry about the downloads. You don’t have to worry about the load times. You don’t have to worry about the simulation or the processing power of the device that you’re on. And you could have that experience of just hanging out and wandering with a really smart, personalized playlist for you and your friend. Or you could maybe input your mood at the time and the playlist could be adapted: “Oh, the other time they were in the mood for that, this is kind of the type of thing that they liked experiencing.” That’s the holy grail of where we get to at some point.

Lauren: Jade, you mentioned you were at a startup trying to build this vision back in 2000. A question for both of you is: why is that concept of cloud-native gaming so daunting? What are some of the challenges developers face today when building cloud-native games?

Jon: My guess is that in the first attempts at making cloud-native games, you don’t actually know what’s going to work. You’re sort of experimenting in this giant gray box. And so talking to folks early on last year, when Stadia first launched, I think a lot of developers were very excited about “bigger is better.” Let’s make 1,000-person battle royales. And they were very excited about the possibility of making ultra-realistic graphics. Okay, we’re going make characters that are so realistic that you can see every hair on their face, powered by racks of supercomputers. And the fallacy of all of this is that they were taking what worked in the last paradigm, which is the console generations, where you had more and more powerful hardware and that enables better graphics and enables more people to play together, and then they’re applying that to the cloud. But what they’re not getting is that the stuff that’s actually going to be unique to the cloud is actually a complete reimagination of these paradigms of gaming. But it’s taken a while to figure that out.

Lauren: That’s something that has kind of run through this whole conversation. We talk about how we’re in phase one of cloud-native gaming and we’re reaching for phase two. Jon, I remember in your post you said you thought we’d see the first cloud-native games hit the market in two or three years. That was a year ago. How far out are we from that vision?

Jon: It feels like we’re still early. But people are experimenting, and I’m excited to see the first games hit the market hopefully in the next year or two.

Jade: Yeah, I don’t think of it as being, like, bam! we’re going to be in wave two and we’re all going to be like, whoa. I think we’re going to slowly see the cloud native features be introduced and realize we’re kind of going to have these different little moments of epiphany. Like, “Oh, okay, I get it. That’s cool. That really changes things.” I think we’re starting to see some of those things now. Some of the features that we’ve integrated with YouTube in terms of crowd play and crowd choice that you can be queuing to play or comment and impact the creator or streamer’s game. That’s starting to do some cloud interaction and bleeding into the wave one. We’re going to start to see the games with procedural generation, or physics simulation, or number of players that are going to be, 10x’ing what’s possible in local hardware probably in the two or so year range. I think if someone is going to say, “We’re going after the ‘Westworld’ vision,” that’s probably a six-year vision to deliver, I’d say. [laughs] You know, with a lot of resources.

Lauren: That’s actually a little scary: six years to “Westworld.” [laughs] That’s…

Jade: [laughs] Well it would maybe a janky “Westworld.”

Jon: I can’t wait. 5G is being deployed globally right now. I think that’s also extremely exciting for the potential impact on mobile gaming because you can essentially now stream 1080p HD quality video to your phone as you’re commuting, as you’re jogging, as you’re waiting in line for your sandwich. I think that opens up a whole new world.

Lauren: Following onto your point, Jade, what is your vision for the gaming landscape in five years then? How do we see this evolving? And which trends are emerging that you anticipate becoming more influential in the space?

Jade: It really is games as the new social platform. That’s number one. More and more, we’re seeing the needs of players in a game as “my place to hang out.” Right? It’s not just my entertainment. It’s my loved pastime. It’s my subculture. It’s the identity of my community. With those needs, how do we deliver something that wasn’t possible before?

I’ve never worked at Nintendo, but I do feel that looking at their approach to creating new hardware, from an outside observer’s opinion, it seems like they take a really user-first needs approach. “Okay, you know, we recognize a need for the family to have a pastime to do together. Families have fun when they get to move, right?” And that’s when the Wii gets designed and a whole suite of games that sold really well and outdid the conventional thinking of: we just want more processing power or whatever.

And I think the proof point is something we talked about earlier, which is “Among Us” being the hit, “Fall Guys” being the big hit. Now we’re in this really exciting year where all of these big hits are coming from these small indie developers, you know, three people or new teams. And it shows that people on the pulse of what the new generation of gamers want are really going to be able to make the things that are most meaningful.

Jon: It also feels like in games there’s been an acceleration of new hits. “Fortnite” was a hit back in 2018. And then before “Fortnite” I think the last big hit that reached a similar level of scale was probably “Pokemon GO,” and that was, like 2015 or ’16. So there was like two or three years between those hits.

But if you look at what’s happened over the last year, we’ve had three, four major hits that have had tens of millions of people playing. “Fall Guys,” “Among Us.” There was “Apex Legends” and the whole the auto-chess phenomenon that came out last year.

Jade: Yeah, it’s part of games really being part of pop culture now. I think that’s a fundamental shift that’s happened, as well. Whereas that was always the case for music, for example, right? If you wanted to be cool with your groups of friends, you had to know about the latest rap track or the latest K-pop band. And games are so widely played by everyone now, especially in the younger generations, that you also need this as social currency.

If you’re a creator, obviously you need it as social currency to stay on the edge of being in the know. But even as a player, you need to talk about that. And so it’s really an interesting phenomenon and shift when a medium goes from being for “core” to being something that everyone cares about.

Jon: I think what struck me the most about “Among Us” was the diversity of people playing it and also tweeting about it on social media. You have older folks that you wouldn’t ordinarily identify as gamers. You know, my wife is a big fan of “Among Us” and she plays it bi-weekly with a circle of moms where they vent about their kids while playing “Among Us.” The sheer diversity of these people who are now gamers, I think it’s an inflexion point for the industry. It’s no longer just little kids playing in their basements. Everyone’s a gamer.

Jade: Yeah, and that’s exciting to me. Because I do have stereotypical core-gamer tastes, I do like a good action game, personally. But I’m very excited about being able to make games for different audiences and amplifying the voices of new creators with different perspectives. And so hopefully there will be a game made especially for moms who want to vent about their kids who are playing in the background, right? [laughs] Cool. Like, why not?

Jon: And let’s not forget that we also have concerts and birthday parties in “Fortnite” and “Roblox.” Is that the beginning of a new wave where there are actually events that are better held in a virtual world than in real life? What are the other events that might spawn from a similar concept? You know, is it political fundraisers? [laughs] Is it schools?

Jade: Absolutely. I think the whole area of events and performance and what that means virtually—live, real time performance—is really, really exciting. I also think there are certain ways that virtual can unlock things in a better way. I mean, we always think about the downsides. But there’s also a lot of benefits to doing things virtually.

As we think of some of the new constraints that we have in the world and spending more of our time on screens or in virtual social environments, there are ways to think: okay, maybe a virtual concert or a virtual performance or a virtual class can be even more fulfilling.

Lauren: To be determined. Well thank you both so much for joining us on the a16z podcast. It’s been such a pleasure.

Jade: Thank you, Lauren. It’s been great.

Jon: Thank you.

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