The EA "LBO"
Gamecraft
In this Special Edition of the GameCraft podcast, Mitch and Blake discuss the $55 billion leveraged buy-out of Electronic Arts by the Private Investment Fund of Saudi Arabia, Siliver Lake Partners, and Affinity Partners -- the largest LBO in US history, and the second largest transaction in the history of the video game business after Microsoft's $69 billion acquisition of Activision. They discuss the deal itself (and how to properly characterize it), some of its immediate implications, and why Mitch's take on the possibilities created by EA going private went from excitement to disappointment...
info_outline
The Sum of the Parts (Ep. 24)
Gamecraft
Mitch and Blake explore the role of consolidation -- primarily through mergers and acquistions -- in building some of the biggest and most durable companies in gaming. They begin with a discussion of the four major strategic uses of mergers and acquisitions: economies of scale, entry into new markets, control of talent and intellectual property, and new technologies. They provide many examples along the way. Mitch argues that M&A is so important to the business that it's actually difficult to avoid ending up on either side of that equation, as an acquirer or as a target of...
info_outline
AI as a Platform (Ep. 23)
Gamecraft
Last season, Mitch and Blake discussed the implications of new Large Language Model Artificial Intelligence in games. In this episode, they return to the topic, this time focusing on games that are using AI as a platform -- meaning, the games are predicated on the use of LLMs to manage gameplay in some way. After introducing the central ideas, they list a series of games they have encountered that make use of these new technologies, from relatively modest text-based adventure and role playing games, to more sophisticated games involving dialog with digital characters, dynamic narratives, and...
info_outline
Hasbro and Lego (Ep. 22)
Gamecraft
Mitch and Blake look at two of the largest toy companies in the world, Hasbro and Lego, and discuss their divergent but ultimately very successful forays into the games business as licensors of intellectual property. Your hosts discuss how both Hasbro and Lego tried to enter the games business directly as developers and publishers of digital games in the late 1990s, how they had very different experiences of success and failure, and how both decided to exit the business in the early 2000s only to return as licensors rather than publishers later in that decade. Mitch tells the story about why...
info_outline
The Venture Deadpool (Ep. 21)
Gamecraft
Mitch and Blake address the unpleasant topic of how and why venture-backed games companies fail. They look first at the nature of venture financing and the inherent differences between venture and publisher money. This leads to a conversation about how developers who were used to working with publishers treated venture capital like production financing as opposed to company financing, and why that distinction matters. They then turn to the flawed strategies and tactics of gaming funds and investors, who tried to make up for their lack of judgment and taste by placing many bets on startup...
info_outline
China (Ep. 20)
Gamecraft
Mitch and Blake look at the current state of the vitally important Chinese gaming market, on the precipice of a bitter trade war resulting from the Trump tariffs. They review the history of the games business in China, discuss the reasons China is so competitive in the global gaming market, and look at how some of the ways the Chinese market diverged from other markets influenced the strategies of Chinese game companies. In particular, they look at how China's relatively late entry into the games business proved to be a benefit, by allowing them to skip the packaged goods era and therefore...
info_outline
Valve (Ep. 19)
Gamecraft
Mitch and Blake take an in-depth look at one of the most important companies in the global gaming business: Valve. They trace the company's origin as the developer of first-person shooter Half Life, their use of the Quake engine and the benefits Valve derived from their relationship with id, and their development and deployment of the Steam platform. They explain how Valve used content like Half Life, Counter-Strike, Team Fortress, and other games to aggregate audiences on Steam, and how they used those audiences as the bedrock of their move to platform-based publishing on Steam. They discuss...
info_outline
The Mobile Gaming Duopoly (Ep. 18)
Gamecraft
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...
info_outline
Cycles & Survival (Ep. 17)
Gamecraft
Mitch and Blake kick off Season 3 of the podcast with a high-level look at the current moment in the video game business, critiquing both the idea that the business is cyclical and we are in a downward phase of the cycle (and the naïve notion of "survive 'till '25"), as well as the idea that the business has simply matured, suggesting we are in a new phase of low growth and consolidation. Instead, they propose a framework for thinking about the games business that argues for the continuous interplay of three innovation forces: content, distribution, and technology. They outline how each of...
info_outline
Artificial Intelligence (Ep. 16)
Gamecraft
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...
info_outlineMitch and Blake look at the ins and outs of intellectual property licensing in games. After discussing the checkered history of the practice, they look at the creative and business reasons why licensed IP continues to be valuable to game creators.
After a quick look at how IP licenses actually function and what to expect from licensors, Mitch and Blake discuss IP arbitrages -- finding gems in the rough that can be licensed at lower cost but with considerable customer acquisition lift, using the examples of Tony Hawk, Kim Kardashian, and Sponge Bob. They draw an important distinction between celebrity endorsement and IP licensing.
The move on to a deep dive on EA Sports, one of the great IP licensing-based businesses ever created in video games. They talk about the EA "house style" of realism based on actual teams and players, and what that meant from an IP acquisition standpoint. Mitch explains their high-priced exclusive licenses with the NFL as well as their complex clockwork licensing regime for the product formerly known as FIFA, which was so resilient it allowed them to cease licensing the master IP itself. They also talk about the sports where EA lost -- like baseball and basketball.
Your hosts turn to the topic of the recently-announced Epic/Disney deal. They present their outsiders' view of Epic's IP partnership strategy, and how Epic has tried to weave media IP, celebrities/influencers, and music licensing into a massive re-engagement scheme of on-going eventfulness for their "forever game" Fortnite. This leads to a discussion of Disney's struggles in gaming and comparisons to the game strategies of their studio competitors Universal and Warner Bros.
They conclude the episode with a look at outbound licensing from game IP -- so-called "transmedia." They look at some early examples, then turn to the recent break-out hits like Super Mario Brothers, Five Nights At Freddy's, The Last of Us, and Arcane. With dozens of new game projects in development in Hollywood after the success of these properties, Mitch and Blake wonder whether outbound licensing will add a new revenue stream for developers who take the risk to develop original IP.