Gamecraft

Football nerds unite! Mitch & Blake are back with a special episode on the 2026 FIFA World Cup. In this episode they provide a very opinionated "Consumer Guide" to the most watchable matches of the Group Stage of the tournament. Show Notes: Mitch's previous World Cup Consumer Guide blog on Medium AFCON final controversy (Morocco v. Senegal) Brazil v. Morocco (6/13) A- Ecuador v. Ivory Coast (6/14) B+ Netherlands v. Japan (6/14) B+ France v. Senegal (6/16) A- England v. Croatia (6/17) A- Mexico v. South Korea (6/18) B+ Argentina v. Austria (6/22) B+ Japan v. Sweden (6/25) B+ USA v. Türkiye (6/25) B+ Norway v. France (6/26) A- Uruguay v. Spain (6/26) A Colombia v. Portugal (6/27) B+

Blake and Mitch discuss the current environment for funding games and some of the challenges and opportunities for founders in the games space. They begin with a short survey of the current venture capital environment and the difficulties presented by industry consolidation, which has taken several of the important buyers out of the market. They also look at the pivots of some of the major game-specific venture funds, and how their investment strategies are changing to meet the current moment. They turn to discussing the need to do more work, to show more proof, with less cash. They talk about the need for founders be prepared to answer questions about AI (and its implications for reducing costs). Regardless of whether AI will actually make games less expensive to create, venture capital investors will assume AI leverage in a new studio. They warn against trying to hand-wave or finesse the AI question, and instead argue for a purposeful, first-principles approach to this new, disruptive technology. Your hosts turn to a look at the history of Stardew Valley and show how it has become a shining example of an independently-developed Forever Game that reached extraordinary success in an incredibly capital-efficient manner. They talk about how Stardew Valley (and Jenova Chen's Sky) might be templates for a low-burn, long-iteration approach to making a successful Forever Game. Mitch and Blake close the episode with a look at how intellectual property has changed from marketing and customer acquisition leverage to a stand-alone value creation opportunity itself. They look at Hollywood's current obsession with games, and how some of the most successful movies in recent years have been based on game IP. They also look at the recent deals where game companies licensed their telemetry data to AI companies for training purposes, and how the new General Intuition company is using game telemetry from their previous Medal clip business to train AI models.

Mitch and Blake offer their thoughts about how to navigate the introduction and impact of large language model AI in the video game business. They begin by discussing their opinion that AI represents a significant technological innovation with potentially profoundly disruptive implications. Beyond even a simple technology innovation, AI is likely to be a paradigm-changing event, that calls into question many of the accepted methods and ideas underlying current game production and marketing. After discussing their intentions in recording this episode -- that this is very real and very threatening to the competitive positioning of western developers -- they introduce their thesis that AI is going to hollow out the middle of the game development cost stack, and in so doing, potentially put the middle tier of games under even more pressure than it's been under lately. It will reduce the costs of prototyping, but perhaps not the overall cost of development and go-to-market. And it will cost jobs, just as every previous paradigm change in gaming has done. After a brief interlude to discuss the often ill-considered backlashes against AI from inside the games business, they finish the episode by discussing in great detail the five categories of companies and professions that they think will be outside the immediate reach of LLMs -- categories that may actually get more valuable and defensible in an AI-dominated world.

Mitch and Blake discuss the mobile duopoly in which Apple and Google exert extraordinary power by tying their app stores to hardware and software platforms. They warn that the inflexible and expensive distribution systems on iOS and Android could be models for future PC and console distribution systems. They briefly review the history of mobile distribution and mobile technology innovation from the late 90's to the present, and what that development meant for content on the platforms. They discuss the similarities between the JAMDAT and Scopely content portfolio strategies as responses to their very different distribution situations. They discuss in depth the often perverse incentives that are created by platform dynamics and distribution expenses, which lead to content and customer acquisition strategies that are designed to maximize return on invesment rather than quality entertainment. Blake explains the particularly dark advertising strategies of companies like Playrix that intentionally deceive users. They make the case for government regulation as perhaps the only solution to the current mobile distribution cost gouging problems, given the market power of the two duopolists, and explain why sideloading isn't a simple solution to the distribution problem. Finally, they discuss the increasing similarities between the iOS App Store and Steam, and why that is a frightening development. Show Notes: Macworld 2007 iPhone Announcement Do [Steam] Wishlists Matter Any More?

In their final episode of Season 2, Mitch and Blake take on the complex and highly speculative topic of the impact of recent improvements in artificial intelligence on the games business. Your hosts acknowledge that the sector is moving so quickly that this episode could be obsolete by the time it airs, and warn that it's difficult at this early moment to look too far into the future. Mitch offers a loose framework for thinking about AI in game production, mapping this framework to specific areas of game creation and publishing that could be effected by AI. They discuss in particular the disruption that could be caused by massively increased efficiencies in the creative pipeline, the impact on the game labor force, and how the incumbents may be more vulnerable in games than in other software spaces. Mitch tells the story of his first meeting with then-game developer Demis Hassabis (today the CEO of Google DeepMind). Mitch and Blake look at the unpleasant prospect of what behavioral analysis, population clustering, and dynamic ad personalization may mean for the dark arts of paid customer acquisition. After a look at what AI-enabled game creation might augur for distribution platforms already choked with content, they look at the bull and bear cases for game AI, and its implications for the future of the games business.

In perhaps their most important episode of the series, Mitch and Blake explain what they mean when they use the term "distribution" and why it is so important to their understanding of how the video games business functions. Like they did with the term "publishing" last season, they try to recontextualize distribution as a much larger and more important concept than simply moving atoms or bits into commerce. Your hosts define distribution as the myriad of systems that exist in between the developer of a game and the ultimate end-user of that game, all intended to enable access to the game. They explain how every choice of system extracts a cost, how the sum of these costs -- both monetary and non-monetary -- effects enterprise value creation, and how the colloquial notion that "distribution is a commodity" is incredibly naive. They provide many examples of how this concept actually functions in the real world of the games business, including how packaged goods distribution worked, why customer acquisition is almost always an arbitrage, and what happens when a distribution system breaks.

Mitch and Blake explore the idea of independent game development. They attempt to define "indie" in the video game context -- something that proves more difficult that it might seem on the surface. They discuss the early successful indie developers in the 90s, and examine how the technology and business innovations that revolutionized the industry in the 20th century (online distribution, new platforms, new business models) catapulted indie developers into positions of power and influence that rivaled, and even surpassed, their incumbent competitors. They discuss the new publishers like Annapurna who are curating indie games under a brand that functions as an important aspect of the go-to-market for the games they are publishing. They conclude with a look a the modern "incubation" environments where new indie developers are cutting their teeth, such as Roblox and UEFN/Fortnite Creative.

Mitch and Blake discuss the nuances of game financing. They begin by explaining how the publishing model of advances against royalties functions, and what the expected costs and benefits are for both the developer and publisher. After a brief discussion of bootstrapping, they do a deep dive on venture capital financing for games. They reveal how venture capital firms make money, drawing a sharp contrast with how traditional game publishers make money. This leads to a conversation about the implied promises that game studios make when they take venture capital. Mitch talks about how ill-prepared he thinks most game companies are to deliver on those promises, and how willing some venture investors have been to fund studios with no obvious competitive business advantages other than their ability to make cool games. The hosts conclude with a discussion about liquidity. Mitch and Blake provide an overview of the initial public offering market for game companies over the last 20 years, and Mitch shares his experience taking a game company public. Mitch worries that most of the high-profile founders of new game studios are not prepared to be public company CEOs, and how that will affect the venture capital environment for game companies in the future.