"Nobody in our industry is happy"

Rounding up some of my recent reporting, with a couple of bits just for you. Not quite an official Game File newsletter, but we're getting there.

Concept art for The Finals, the newly released game from Nexon-owned studio Embark. Image: Embark Studios

Sometimes an interviewee just gets on a roll. Take the time back in 2007 (!) when I was interviewing Alex Ward, then the creator director at EA’s Criterion Games, and asked him about “beating” a game. He jovially laid into me for a few minutes. Why did Americans use such an aggressive word to describe finishing a game? Would we say we “beat” an Eminem album? Do you “beat” War and Peace? On and on he went. He’s always been highly quotable, and it’s just a shame that his rant, which we got on camera for MTV News, is no longer online.

You know who else is also quotable? Outgoing Nexon CEO Owen Mahoney, who got on a roll with me when we chatted in Los Angeles a couple of weeks ago, the day before The Game Awards.

I wrote about my chat with Owen in my final Axios Gaming newsletter, where you will see that he declared: “Our industry is in deep trouble right now, I think, because of throwing bodies at the problem of game development."

Like any skilled person who has something to sell, Mahoney’s problem is conveniently addressed by the latest game he’s promoting: The Finals, a destruction-filled multiplayer shooter from Nexon’s Embark Studios. The game’s a hit. It’s been outranking Call of Duty for concurrent players on Steam.

The Finals was made by a relatively small team. About 100 developers, not the 500+ that Mahoney believes are struggling to innovate in a lot of big-budget games. He doesn’t blame the developers, just the scale they’re operating on. He’s more interested in smaller teams using tech to innovate. Like, say, how The Finals uses innovative server technology to enable widespread destruction that all players experience concurrently. Or, to put it more simply: they found a way to let players collapse buildings onto each other without the action getting laggy, which is pretty cool.

If you read my piece through Axios, you got that.

But I didn’t have room in the Axios newsletter to show how Mahoney got on a roll as he talked about the game industry’s problems. It was really quite something, and I wanted to share it with you.

The following is all him, with a brief interjection from me…

Owen Mahoney, Nexon CEO: I would like our industry to come out with more fun. And there's a lot of people like me in the industry. So I think we have to fight for that. And so I'd like to see more of that. 

By the way, this is not a criticism of everybody else. I can't even tell you how hard it is to green-light a $100 million game project. And the sleepless nights that that will cause. And the fear that will cause.

But clearly nobody in our industry is happy. I hear this over and over again. 

Are customers happy? No. I go on YouTube and Reddit and see a lot of ticked off customers.

Are game developers happy? No. Think about it. Game developers got into our industry—they're highly talented, highly skilled people—they could have gone into banking and could have gotten paid a lot more at, I don't know, Slack or something in Menlo Park. But they went into the games industry, because they love games. And what do they get asked to do? A glorified version of painting leaves on trees in Photoshop. That's still what we're doing in our industry. And so they end up as factory workers. 

So, then, talk about their bosses: the development directors. What are  the development directors doing? They’re managing teams of 500, 1000 people. So they're glorified HR managers. Is that fun for them? No, that's no fun for them. And oh, by the way, they need help from a lot of HR people to be able to manage teams that are that big. Can you imagine a worse group of people to get in the center of a development process than HR heads? I'd rather have my accountant, my tax accountant, do that than an HR person. 

But that's where we are as an industry. I mean, it's really hard to manage a team of 500 or 1000 people.

Okay. So, are CEOs happy? No. Again, guys like me, you get one or two mulligans, right? Your second $100 million bet that went south, everybody's going to be calling for your head inside and outside the company. So, CEOs are not happy. So, what do they do? They try to lower risk, which means we end up in red oceans with very similar projects.

Totilo: You’re not happy?

Mahoney: No, I'm really happy. We’ve found a way around it.

Totilo [turning to the Embark developers in the room]: Are you guys happy?

[They nod.]

Mahoney: I'm talking about the way out of this problem. By the way, my shareholders are happy with me. But most shareholders who cover the games business are not happy at all. 

So, you go: ‘Everybody's unhappy. We have to find a way around this problem as an industry.’ And that is what we've been trying to do. If you talk about: ‘What are we most proud of?’ I'm not sure it's pride, but I think we've found a way, in Nexon at least, with Embark and with other projects that we're doing, to navigate into a way where we can get innovation, and so we can make customers, developers, managers, the CEO–me–and and our investors happy again. And that's how it should work. 

That’s a pretty good rant, huh?

Now, I just need to know, Game File reader, are you happy?

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Other bits from my interview with Nexon CEO Owen Mahoney:

• On Mintrocket, development studio for breakout pixel-art hit Dave the Diver that now also has a multiplayer zombie survival game coming: “It’s a place where we’re trying to be innovative. It’s a label that has different teams.”

• We were talking before The Game Awards, where Dave the Diver had been nominated for best indie game, despite its studio being part of the giant Nexon and therefore not being indie. Would he turn down the Best Indie award if they won it? “Um… I don’t know. That’s the honest answer to your question.” I said I wasn’t really serious. He said: “Look, what I think is most important is: Does our industry have innovation or not? I'm deeply disturbed by the fact that our industry doesn't have nearly enough innovation. And so as a CEO of a company that is in a position to make innovation happen, I'd like to see more of that.”

• In 2022, Nexon put $400 million into AGBO, the cross-media company run by “Avengers” directors Joe and Anthony Russo (Longtime Fortnite mastermind Donald Mustard is there, too). But what was up with Nexon’s 2021 purchase of $100 million worth of Bitcoin? “At the time, we had five billion in cash.,” he noted. “The value went down, but over time we think it’s going to do great.” (It’s worth about $73 million now.)

• On legendary game designer Cliff Bleszinski tweeting earlier this year—and tagging Mahoney—to say that he’d love to revive Lawbreakers, the multiplayer shooter he and a team made for Nexon: “He can call me. He's got my number.” Did they talk? “I like Cliff. I think he's a sharp guy. I'll answer anybody's call if they want to call me.” (Bleszinski declined to comment.)

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Didn’t I say this wasn’t going to be a proper newsletter? I can’t help myself.

Also happening recently:

• A hacker gang called Rhysida dumped 1.3 million files stolen from Sony-owned Spider-Man 2 studio Insomniac Games onto the internet Tuesday morning, after the company seemingly refused to pay a $2 million ransom. The files include Insomniac’s planned slate of games into the 2030s, assets for the team’s upcoming Wolverine game, sales numbers, budgets, business deals as well as a lot of personal info. Sam Sabin, Axios’ cybersecurity reporter (her newsletter rules) covered this, noting that Rhysida claimed responsibility for a ransomware attack against hospitals in August and another against the British Library in November. “Law enforcement officials have also yet to crackdown on the gang or make any public comments about potential investigations,” Sam reports. (On social media, I wrote about the ethical dilemmas of covering the news.)

• Google has settled an app store payment lawsuit brought by attorneys general from 36 states and Washington, D.C., agreeing to pay $700 million and promising to allow app developers to offer alternative billing options, at least for the next several years. Sounds like what Epic was going for in the lawsuit they recently won against Google, right? Actually, Epic doesn’t like this settlement, saying the AGs had initially sought $10.5 billion in damages and criticizing the alternate payment options for still giving Google a sizable cut.

• The year’s flashiest magazine profile of a game studio has appeared in Vanity Fair and the studio in question is The New York Times (makers of Wordle, Connections, Spelling Bee and some Picross-looking grid that uses letters instead of numbers). Notable tidbits: 1) The Times has "roughly 100 Games staffers, which is about the same size as the paper’s Business desk.” 2) NYT shelved a taxi-driving game: “It felt like a little kid’s game.” 3) The Washington Post had tried to buy Wordle? 4) NYT Games app daily active users in Oct = 2.6 million.

Okay. I guess we can this a newsletter. A prequel newsletter, at least, before the real ones.

Given the holidays and some unwinding I still need to do at Axios, I’m not sure how much more I’ll be able to send out before Game File’s proper launch on January 8. But I’ll do my best to keep this soft launch interesting. There are some old interviews I’m eager to revisit and share, but I want to make sure I can do them justice.

Oh, and just so I don’t forget… Why it matters: Because you’re here, you’re curious about games, and I love writing about them.

See you next time!