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280. GTA VI Leaks, Saudi Game Development, VALORANT Skin Profits
Episode 28025th September 2022 • Business of Esports • Paul Dawalibi
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In the latest weekly news and podcast after-show (sponsored by YouGov), we discuss the future of the Saudi Arabian esports and gaming scene following the Next World Forum, GTA VI being leaked, the VALORANT Champions skin bundle generating $32 million, and so much more!

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Unknown:

From the keyboard to the boardroom, this is the

Unknown:

business of esports.

Paul Dawalibi:

The worlds of gaming and esports are evolving

Paul Dawalibi:

every day faster than ever before. With you guvs Living

Paul Dawalibi:

data, you can probe into the real thoughts and behaviors of

Paul Dawalibi:

esports fans and gamers worldwide. If you're a team, a

Paul Dawalibi:

brand, an agency or a rights holder, you should be talking

Paul Dawalibi:

with YouGov their partners with the biggest names in esports and

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the biggest brands all around the world, driving compelling

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results every single day, check out yougov.com/bo E and schedule

Paul Dawalibi:

a call with YouGov. Today, from the keyboard to the boardroom.

Paul Dawalibi:

This is the business of esports weekly news show slash post

Paul Dawalibi:

podcast live stream. I am Paul the profit that will leave you

Paul Dawalibi:

I'm joined today by my friend and co host The Honorable Judge

Paul Dawalibi:

Jimmy burrata, for those of you who are new here welcome. What

Paul Dawalibi:

we do is we cover the most pressing gaming and esports

Paul Dawalibi:

topics and news of the week. But we look at all of it through a

Paul Dawalibi:

business and C suite lens, we dissect we analyze the business

Paul Dawalibi:

implications of everything happening in this industry. And

Paul Dawalibi:

best of all, we get to do it live with you guys. You get to

Paul Dawalibi:

ask questions get in our faces. I know this is not our usual

Paul Dawalibi:

time. I'm sorry for those who are tuning in. Or maybe you're

Paul Dawalibi:

missing this because you want you tuned in at our usual

Paul Dawalibi:

Wednesday 2:30pm Eastern slot. We had major technical issues.

Paul Dawalibi:

Unfortunately, we couldn't go live at that time. So we're

Paul Dawalibi:

recording this show for anyone who's here live welcome. But I

Paul Dawalibi:

assume many, many, many of you are going to be watching this

Paul Dawalibi:

after the fact. And again, apologies, we are not changing

Paul Dawalibi:

the time of the show. It is always going to be Wednesday at

Paul Dawalibi:

2:30pm Eastern time for now. But we did have technical problems

Paul Dawalibi:

this week. And we apologize to all of our listeners and our

Paul Dawalibi:

viewers Jimmy How you doing?

Jimmy Baratta:

Good, good. Paul, we're right out of my mouth, you

Jimmy Baratta:

know, sorry, to the to the guys that regularly tune in live to

Jimmy Baratta:

chat with us. But for the 10s and 10s of 1000s of you don't

Jimmy Baratta:

listen offline throughout the week, it's literally no

Jimmy Baratta:

different. So we'll get through some great stories here. And

Jimmy Baratta:

there like what, let's go.

Paul Dawalibi:

i It's also just because this was such a big news

Paul Dawalibi:

week, like there's so much that has happened so much drama, like

Paul Dawalibi:

so much like juicy lot of juicy news for sure. For the show that

Paul Dawalibi:

I felt terrible letting that go to waste.

Jimmy Baratta:

I'm kind of sick of it. Honestly, Paul, like I

Jimmy Baratta:

must have gotten eight different stories in my inbox about the

Jimmy Baratta:

GTA six leak. And by the end of the day, I was like this is all

Jimmy Baratta:

news to me. I woke up at five for some reason that morning.

Jimmy Baratta:

And it was the only thing flooding my inbox and so we

Jimmy Baratta:

don't need to talk about any of that stuff. It's been. That's

Jimmy Baratta:

that's all the point.

Unknown:

We're not going to talk about that stuff. What are we

Unknown:

doing here? I don't know. How's your day? By the way, cod beta

Unknown:

out? Did you try it yet?

Jimmy Baratta:

I haven't played it. I've just been religiously

Jimmy Baratta:

watching clips and other people's opinions of it. And the

Jimmy Baratta:

third person game mode, for example, looks pretty

Jimmy Baratta:

interesting. And I also liked that they limited that game

Jimmy Baratta:

mode. So only you're only playing in third person mode

Jimmy Baratta:

with other people playing in third person. You can't switch

Jimmy Baratta:

between the two. But with other first person players,

Paul Dawalibi:

it is weird. It is weird to see cod in that

Paul Dawalibi:

definitely weird

Jimmy Baratta:

but right like if I spend $20 on a skin I want to

Jimmy Baratta:

see the skin you know that's a great argument for enabling

Jimmy Baratta:

third person mode.

Paul Dawalibi:

We do have article and one article this

Paul Dawalibi:

week on skins which I'm going to get to and we aren't we are

Paul Dawalibi:

going to talk about GTA six. Because we have to, because I

Paul Dawalibi:

sort of feel vindicated by the whole thing when we had Strauss

Paul Dawalibi:

Zelnick on the podcast. And it's been a long time now. It's been

Paul Dawalibi:

maybe two years since he was on the show. I gave him the

Paul Dawalibi:

opportunity to announce the GTA six on the podcast, I gave them

Paul Dawalibi:

that chance. And had they just announced it on the podcast,

Paul Dawalibi:

this leak would have been an nothing burger, right? Like it

Paul Dawalibi:

would have been, it wouldn't have mattered it wouldn't even

Paul Dawalibi:

have made the news because everyone would have been like,

Paul Dawalibi:

well, he already announced it on business of esports. So I hate

Paul Dawalibi:

to say I told you so but I kind of it's kind of one of those I

Paul Dawalibi:

told you so moments, if only it announced it on the show.

Jimmy Baratta:

For anyone else with a marketing campaign. You

Jimmy Baratta:

know, we are always always happy to work with you and rarely

Jimmy Baratta:

wrong over here.

Paul Dawalibi:

Let's talk about what's on the podcast this week,

Paul Dawalibi:

which if you're watching if you're here live, you've

Paul Dawalibi:

probably already seen the podcast episode this week. It's

Paul Dawalibi:

already out and it was my interview at next World Forum

Paul Dawalibi:

with His Royal Highness Prince Faisal, who is the president of

Paul Dawalibi:

the Saudi Esports Federation and it was a really fun interview

Paul Dawalibi:

that I did with him on his view of like Saudi Arabia and esports

Paul Dawalibi:

in Saudi and all those kinds of good things. But I figured as a

Paul Dawalibi:

consequence, we should start with let's start with something

Paul Dawalibi:

relevant or related in the news, which is this week, it was

Paul Dawalibi:

supposed to in fact, it was supposed to be announced that

Paul Dawalibi:

next World Forum, it got delayed, but Saudi basically

Paul Dawalibi:

announced their giant sort of country's vision or plan for

Paul Dawalibi:

gaming and esports in the region. And basically, that's it

Paul Dawalibi:

okay, this came directly from the crown prince from NBS

Paul Dawalibi:

announced the plan to develop the country's gaming and esports

Paul Dawalibi:

industry, it says aiming to create 39,000 jobs and boost GDP

Paul Dawalibi:

by 13. Point 3 billion by 2030. So they're calling this the

Paul Dawalibi:

national gaming and esports strategy. I'm not going to open

Paul Dawalibi:

the PDF there's like a PDF attached to it that sort of

Paul Dawalibi:

outline the strategy. I will say in this may be totally

Paul Dawalibi:

coincidence, a lot of stuff borrowed by seemingly borrowed

Paul Dawalibi:

from my own work for them may be a total coincidence. That's the

Paul Dawalibi:

highest form of flattery, Paul, imitation is the highest form of

Paul Dawalibi:

flattery, I am flattered by the level of imitation, both of this

Paul Dawalibi:

show and the many of the ideas, I brought the kingdom anyway. So

Paul Dawalibi:

20 government entities are going to be involved here 86 new

Paul Dawalibi:

initiatives, which is a lot. And what they're saying is one of

Paul Dawalibi:

the targets they've said is they want studios in the kingdom to

Paul Dawalibi:

produce more than 30 games by 2030. And in fact, it says plans

Paul Dawalibi:

to develop 30 competitive games by 2030. This is a an additional

Paul Dawalibi:

article that I brought up just because it supports the other

Paul Dawalibi:

one. So they want to have 30 competitive games essentially

Paul Dawalibi:

developed in the country by 2030, which is eight years from

Paul Dawalibi:

now, not even seven, seven years seven and change. That's a lot.

Paul Dawalibi:

And they talk about how there'll be different areas of focus,

Paul Dawalibi:

including tech hardware development, game production,

Paul Dawalibi:

esports, competition, infrastructure, regulations,

Paul Dawalibi:

education, talent, acquisition, financing, etc. So very

Paul Dawalibi:

ambitious plan. Very cool to see this at a national level. I'm

Paul Dawalibi:

curious Jimmy a what you thought in the news and be maybe

Paul Dawalibi:

specifically this this one secondary article I brought up,

Paul Dawalibi:

which is the 30 competitive games? What'd you think of that?

Jimmy Baratta:

Yeah, you know, this is a loaded, loaded

Jimmy Baratta:

question and topic here. And one of the great you referenced your

Jimmy Baratta:

interview with with Prince Faisal. And one of the great

Jimmy Baratta:

excerpts, I think, and I can't remember if we got that recorded

Jimmy Baratta:

or not, where he had mentioned wanting to increase their GDP by

Jimmy Baratta:

gaming by that amount in the interview, and then the

Jimmy Baratta:

announcement came thereafter. So we kind of got a sneak peek

Jimmy Baratta:

there, I think, into just how seriously they're thinking about

Jimmy Baratta:

gaming, but also metrics, right, like measurable intel on what

Jimmy Baratta:

they're doing to reach those goals, right 30 competitive

Jimmy Baratta:

titles or increasing, you know, X many events over the course of

Jimmy Baratta:

the year, and the spend that they were planning to do also

Jimmy Baratta:

over the next 10 years that we've been hinting at at the

Jimmy Baratta:

show, just because of our relationship and work in the

Jimmy Baratta:

region. You know, I think it's absolutely necessary that if you

Jimmy Baratta:

want to be a big player in the gaming space, no pun intended

Jimmy Baratta:

there. But if you want to be a mega, if you want to have a seat

Jimmy Baratta:

at that table, it's not enough to host events, it's not enough

Jimmy Baratta:

to have people that play games and that compete at the highest

Jimmy Baratta:

level, you need to be part of the creation, right part of the

Jimmy Baratta:

process. Because we know from working in this industry for a

Jimmy Baratta:

number of years now, for the last, you know, for however

Jimmy Baratta:

long, any of us have been working here that all of these

Jimmy Baratta:

things are different mechanisms and vehicles for attention and

Jimmy Baratta:

revenue. But it all ties back to the underlying game. And if you

Jimmy Baratta:

don't have a fun game, if you don't have a captivating

Jimmy Baratta:

audience, if you don't have unique IP, then you're missing

Jimmy Baratta:

the most important part of that puzzle. So I think if they're

Jimmy Baratta:

going to develop 30 games by 2030 Wow, I mean, it's a lot to

Jimmy Baratta:

chew right, I think one or two

Paul Dawalibi:

like let's put this in context, right? Yeah.

Paul Dawalibi:

What What will a blizzard plus a riot plus a CD Project three of

Paul Dawalibi:

the biggest studios in the world? Like what will they

Paul Dawalibi:

combined? Oh, throw in take two there. What will three of them

Paul Dawalibi:

combined put out in terms of games over the next seven and a

Paul Dawalibi:

half years? Probably not nowhere near 30 games,

Jimmy Baratta:

and that's three or four studios combined? Right?

Jimmy Baratta:

I remember when Riot announced valorant which was then project

Jimmy Baratta:

a that was one of maybe 10 titles, I think that they said

Jimmy Baratta:

that they were releasing over the next 10 years. And we still

Jimmy Baratta:

haven't seen you know, half of those. So it's ambitious for

Jimmy Baratta:

sure. But I would say based off my knowledge of the region and

Jimmy Baratta:

the companies and people there they backup their talk right? I

Jimmy Baratta:

don't know if these titles are going to be AAA, best quality,

Jimmy Baratta:

lots of fun, you know, these are expensive things and there's no

Jimmy Baratta:

shortage of money there. But there is a shortage of talent.

Jimmy Baratta:

You know, we see it everywhere. And that was part that was the

Jimmy Baratta:

most compelling part to me about the Bungie acquisition from Sony

Jimmy Baratta:

was a billion dollars of that went to keeping the talent

Jimmy Baratta:

happy. You can spend a lot in a lot of areas but the talent is a

Jimmy Baratta:

is a highly competitive thing. And it's a very difficult thing.

Jimmy Baratta:

I think. Not everyone like you Paul will was willing to move

Jimmy Baratta:

their lives to halfway across the world no matter where in the

Jimmy Baratta:

world that is Middle East, South America anywhere. That's a big

Jimmy Baratta:

endeavor. So you know I had a great time there, I thought I

Jimmy Baratta:

think that region is looking about gaming in the right lens

Jimmy Baratta:

and has the right plan for it. But it's going to be a

Jimmy Baratta:

challenge, I think, to recruit talent to the kingdom to build

Jimmy Baratta:

these games. I think if they were to make one hit, however,

Jimmy Baratta:

or two hits in the next 510 years that they've created, that

Jimmy Baratta:

would be a mega success story. So you know, hope they get 30.

Jimmy Baratta:

But I think I don't think you need to shoot that high to have

Jimmy Baratta:

a win here.

Paul Dawalibi:

Yeah, it's interesting, right? Like,

Paul Dawalibi:

obviously, a lot of the ideas outlined in this strategy are

Paul Dawalibi:

very familiar to me. You're really familiar. And so I, you

Paul Dawalibi:

know, I believe in the strategy, I buy the strategy, I also

Paul Dawalibi:

think, no question, they have commitment, they have vision,

Paul Dawalibi:

right? They have the resources, all the big boxes usually need

Paul Dawalibi:

to check to see something like this come to life. They've

Paul Dawalibi:

checked those boxes. And if you look at the success of gamers,

Paul Dawalibi:

eight, which was their eight week, like big festival in

Paul Dawalibi:

Riyadh, I think they've proven that they can serve the local

Paul Dawalibi:

market, no question, right? Like they can put on gaming

Paul Dawalibi:

activations events, they can get the local population talking

Paul Dawalibi:

about gaming, thinking about gaming going to a gaming thing.

Paul Dawalibi:

And I think gamers eight has proved that at least they can

Paul Dawalibi:

execute locally, right, and that it works there. I think the big

Paul Dawalibi:

remaining question mark, for me, and I think you pointed to it

Paul Dawalibi:

is, is there the talent there to build this grand vision, no

Paul Dawalibi:

matter where in the world? This was, that's going to be hard,

Paul Dawalibi:

right? If you were in China, I would say, Well, where are you

Paul Dawalibi:

going to get all the people to, you know, to build this thing.

Paul Dawalibi:

So I think that's definitely a challenge. And I think it's even

Paul Dawalibi:

more subtle than that. It's you need a lot of people at the top

Paul Dawalibi:

who understand gaming at a very subtle level, have played the

Paul Dawalibi:

games the last 20 years of their lives, know what's going on know

Paul Dawalibi:

what people want, know what gamers want, speak their

Paul Dawalibi:

language, but also understand the business side of it. And if

Paul Dawalibi:

I think of how many people there are like that in the world, I

Paul Dawalibi:

can probably count on two hands. You know, if there's 10 people

Paul Dawalibi:

in the world who fill that bucket, you basically have a

Paul Dawalibi:

vision here where you probably need to get 50% of those people

Paul Dawalibi:

to go to Saudi Arabia, maybe Money solves that problem. I

Paul Dawalibi:

don't know if money solves that problem. It is a challenge. No

Paul Dawalibi:

question.

Jimmy Baratta:

I would say more likely than not, that might be

Jimmy Baratta:

one of the few problems in this scenario that money can't solve.

Jimmy Baratta:

Because when you're talking about expertise at that level,

Jimmy Baratta:

that's the Tiger Woods live story all over again, where the

Jimmy Baratta:

money doesn't change his legacy, or what it's worth to him.

Jimmy Baratta:

Right? There has to be something more to it. It has to be

Paul Dawalibi:

true. But they got the five out of 10, who are

Paul Dawalibi:

willing to come for the budget? They did. Absolutely. And so

Paul Dawalibi:

you'll need five out of the 10. Right. Like there's like I said,

Paul Dawalibi:

there's probably 10 People at the very top who can who can

Paul Dawalibi:

execute on a vision this big,

Jimmy Baratta:

I'd say we've got eight out of 10 on that front.

Paul Dawalibi:

And then And then the question becomes, you know,

Paul Dawalibi:

if they're coming just for the bag, are they there for a year,

Paul Dawalibi:

two years? Or do they see this through for the next 10 years?

Paul Dawalibi:

And do they truly care about building out what is a grand

Paul Dawalibi:

vision, that's always sort of the problem when the law is the

Paul Dawalibi:

bag and only the bag. But again, like when you have virtually

Paul Dawalibi:

unlimited resources, and this grand division, it's hard to bet

Paul Dawalibi:

against. And I wouldn't be betting against obviously, I'm

Paul Dawalibi:

not I moved here, right. Like, I'm clearly on the side of

Paul Dawalibi:

betting that this thing comes to fruition. I just think it'll be

Paul Dawalibi:

interesting to see if they avoid what are clearly some speed

Paul Dawalibi:

bumps ahead. That's an ambitious plan with very aggressive

Paul Dawalibi:

timelines, which I love. But there are speed bumps that that

Paul Dawalibi:

maybe or maybe they're not aware of. And so it'll be interesting

Paul Dawalibi:

to see how they navigate that and holodeck being here will for

Paul Dawalibi:

sure be a part of this. So obviously will be interesting to

Paul Dawalibi:

be a part of it. But I love I love I think more countries

Paul Dawalibi:

should be doing this. Let's put it that way. I think it's silly

Paul Dawalibi:

that that you have major economies like the US even go

Paul Dawalibi:

right to sort of what should be the most obvious like, where's

Paul Dawalibi:

the national strategy around gaming? Like, where is that

Paul Dawalibi:

vision building to say, we want to make this a, you know, $2

Paul Dawalibi:

trillion industry by 2030. The US could absolutely do that. If

Paul Dawalibi:

there was actual conviction around it and actual leadership

Paul Dawalibi:

around it, and there just isn't. So you have to appreciate what

Paul Dawalibi:

Saudi Arabia and MBS I mean, there's no lack of vision there.

Paul Dawalibi:

And no lack of big thinking to me. I don't know if you had any

Paul Dawalibi:

other thoughts before we move on here.

Jimmy Baratta:

We got it. We got to get him out of stores to get

Jimmy Baratta:

through and I and I know we're people fans already know, We're

Jimmy Baratta:

fans of that region, so to speak. So let's keep it rolling.

Paul Dawalibi:

Let's talk about you mentioned this one. This one

Paul Dawalibi:

was an interesting one, because the number just jumped out at me

Paul Dawalibi:

but we were talking about skins and cod and here. The headline

Paul Dawalibi:

valorant champions bundle raises over 32 million in revenue. So

Paul Dawalibi:

valorant They had a bundle where they were selling skins

Paul Dawalibi:

obviously. And as part of this, they introduced a limited time

Paul Dawalibi:

champions bundle comprised for five different skins connected

Paul Dawalibi:

to their champion, the champions finals, obviously, which were

Paul Dawalibi:

happening in Turkey and 50% of the net proceeds were going to

Paul Dawalibi:

go direct bleep two teams participating in this

Paul Dawalibi:

championship. And some of these items were never going to go

Paul Dawalibi:

back into the store. They sold $32 million worth of this bundle

Paul Dawalibi:

with 16 million going to the teams I thought it was a cool

Paul Dawalibi:

story because this is like dough does yearly you know

Paul Dawalibi:

international whatever that whatever they call it that they

Paul Dawalibi:

sell the Compendium or you know that they raise 10 zillion

Paul Dawalibi:

dollars for every year for the the for TI, are you surprised

Paul Dawalibi:

that the number here Jimmy 32 million on one bundle?

Jimmy Baratta:

Yeah, no, I'm surprised that a lot of this

Jimmy Baratta:

honestly 32 millions a lot, especially for a digital digital

Jimmy Baratta:

good, right, where there's a false sense of scarcity because

Jimmy Baratta:

they just decided to limit when it would be available. And and

Jimmy Baratta:

when you could buy it just congrats to congrats to that

Jimmy Baratta:

team, honestly, that created that the skins are awesome. I

Jimmy Baratta:

think I've always liked the valorant skins. I do have a

Jimmy Baratta:

little bit of beef with with my friends over at valorant.

Jimmy Baratta:

Because I remember purchasing some skins in the beta that

Jimmy Baratta:

didn't transfer over when the game was released. And I was

Jimmy Baratta:

like, so I'm out 10 or 20 bucks or whatever. And you guys know

Jimmy Baratta:

who you are. And I take Venmo and PayPal. But But no, these

Jimmy Baratta:

skins are really cool. I think they look awesome. It's a ton of

Jimmy Baratta:

money. To me, the headliner of the story is the teams are

Jimmy Baratta:

taking 50% of that, like what a generous split, what a massive

Jimmy Baratta:

win for anyone that that got out partake in that rev share.

Jimmy Baratta:

Because I mean, they're going to do this every year, they're

Jimmy Baratta:

going to do this five, six times a year now. But this is

Paul Dawalibi:

not new again to like Dota. And ti they do this

Paul Dawalibi:

exact thing. And this is how the prize pool for TI is so big

Paul Dawalibi:

because they sell this bundle ahead of time. It's exactly the

Paul Dawalibi:

same model. And I'm not even sure I think it's also a 5050

Paul Dawalibi:

split for Dota. It may be even more than 5050. To be honest,

Paul Dawalibi:

like it's not new. I was just I think I continue to be surprised

Paul Dawalibi:

at the engagement with valorant. Because anecdotally it feels

Paul Dawalibi:

like the game sort of went away, at least from a player

Paul Dawalibi:

perspective not went away. That's that's maybe too harsh.

Paul Dawalibi:

But it's like, anecdotally, the game doesn't feel nearly as

Paul Dawalibi:

hyped as the numbers suggest. Does that make sense?

Jimmy Baratta:

Yeah, I mean, there's, it's been a kind of a

Jimmy Baratta:

down year in gaming in terms of new releases. And a lot of the

Jimmy Baratta:

hype is really more around the content creators these days and

Jimmy Baratta:

less around the esports orgs. And the players, there's been a

Jimmy Baratta:

massive shift, right towards content creation. So I see what

Jimmy Baratta:

you're saying there in terms of just certain games that don't

Jimmy Baratta:

have a lot of hype at the moment. I think that valorant

Jimmy Baratta:

has been chugging along in a steady pace, where we've had a

Jimmy Baratta:

lot of different headlines over the launch of the of the league

Jimmy Baratta:

and the different structures for which they were accepting

Jimmy Baratta:

applications and how that would look internationally as well as

Jimmy Baratta:

domestically. So I mean, they've been in the headlines, we've

Jimmy Baratta:

been talking about them. But I agree with you that the

Jimmy Baratta:

excitement over one thing or another has not felt the same.

Jimmy Baratta:

You know, at least for me this year with all the games.

Jimmy Baratta:

Honestly, I haven't really felt super excited about gaming since

Jimmy Baratta:

like season three of fortnight. So maybe I'm just, you know, an

Jimmy Baratta:

old man yelling at clouds at this point. But

Paul Dawalibi:

this, this validates the whole converse,

Paul Dawalibi:

things I've been saying. But also what Arnold from Genji

Paul Dawalibi:

said, right, which is this is a fart like selling digital goods

Paul Dawalibi:

like this seems to be a way better way of funneling revenue

Paul Dawalibi:

and profits to teams who participate in these leagues and

Paul Dawalibi:

making the whole the whole ecosystem more sustainable.

Jimmy Baratta:

It's the only way that makes it worth it for the

Jimmy Baratta:

teams. Right. And we know that a lot of the teams that we've had

Jimmy Baratta:

on the show have been saying that I know, well, I don't want

Jimmy Baratta:

to talk too much internally about X set. But you know, the

Jimmy Baratta:

teams are looking for or looking to work with the publishers. And

Jimmy Baratta:

the teams have a lot of leverage here, I think. And again, kudos

Jimmy Baratta:

to the ones that are making it happen that are keeping the

Jimmy Baratta:

teams happy. It's a rinse and repeat. You know, this is easy

Jimmy Baratta:

to monetize thing. And it's an it's one of those things like

Jimmy Baratta:

you said that can drive excitement around the game,

Jimmy Baratta:

right? It was one of the one of the first ones that we covered

Jimmy Baratta:

almost a year ago that said, Hey, we know that EA Sports

Jimmy Baratta:

Business is not necessarily doing all that great. We're

Jimmy Baratta:

redirecting that towards skins. And in game transactions. That's

Jimmy Baratta:

kind of the point here. So the fact that they're getting teams

Jimmy Baratta:

get a cut of that, that keeps everyone alive, that keeps

Jimmy Baratta:

everything running smoothly. I didn't know Dota was 50%. Also,

Jimmy Baratta:

Paul, that seemed like a lot to me. But either way is a lot.

Jimmy Baratta:

Like I said, as long as the teams are happy, you're gonna

Jimmy Baratta:

have a thriving ecosystem because if you don't have anyone

Jimmy Baratta:

competing, then you just kind of have a fun game, which is a

Jimmy Baratta:

necessary component but I think you're leaving a lot on the

Jimmy Baratta:

table without without the second part of that. Well,

Paul Dawalibi:

you mentioned hype, Jimmy so I think it's

Paul Dawalibi:

important that we get to the max hype story or maybe the most

Paul Dawalibi:

hyped game of all time story this week and that we have to

Paul Dawalibi:

talk about the leak here. We're getting into the juicy stuff. We

Paul Dawalibi:

have leak stuff we have drama stuff coming the leak here. GTA

Paul Dawalibi:

six in the news and the headline 90 videos of rockstars

Paul Dawalibi:

unreleased Grand Theft Auto six games surface online in massive

Paul Dawalibi:

leak so more than 90 gameplay video Those of GTA six were

Paul Dawalibi:

leaked, Rockstar confirmed the leak is real. And the user

Paul Dawalibi:

claiming responsibility says they could leak more data soon.

Paul Dawalibi:

So there were actual gameplay clips that were posted online.

Paul Dawalibi:

Source code was posted assets, test builds, etc. And the hacker

Paul Dawalibi:

reportedly also took credit for a cyber attack on Uber.

Jimmy Baratta:

Oh, did that. Did the hacker take credit for that?

Jimmy Baratta:

I thought Uber had suspected him of being the same hacker. I

Jimmy Baratta:

didn't realize that I knew that there was a common thread there.

Jimmy Baratta:

Interesting.

Paul Dawalibi:

Supposedly, the hacker even wrote that they're

Paul Dawalibi:

looking to negotiate a deal.

Jimmy Baratta:

I saw that That's so dumb. So blackmail,

Paul Dawalibi:

they want to pay the Hey, I guess. So the leaks

Paul Dawalibi:

real? I don't need to play it here or anything like that. I'm

Paul Dawalibi:

sure everyone has seen sort of the leaked videos or leaked

Paul Dawalibi:

footage by now. But what do you make of this, Jimmy? And how

Paul Dawalibi:

much do you think from a business perspective? This hurts

Paul Dawalibi:

the game or helps the game? Like, where are you on this one?

Jimmy Baratta:

You know, I think there are instances where this

Jimmy Baratta:

is wrong. But in general, I think there's no such thing as

Jimmy Baratta:

bad press. I think we were already excited for GTA six,

Jimmy Baratta:

everyone already knew it was in development. The Sneak Peek This

Jimmy Baratta:

is, I mean, if you measure the amount of impressions that all

Jimmy Baratta:

these stories are getting that all of Grand Theft Auto

Jimmy Baratta:

community is kind of receiving from from the result of this,

Jimmy Baratta:

it's control of your brand image versus just you know, pleasing

Jimmy Baratta:

the fans. And I think everyone's happy to know one that it's in

Jimmy Baratta:

development confirmed because again, they also Rockstar also

Jimmy Baratta:

said, hey, yeah, that's ours. Right. So that's nice to know.

Jimmy Baratta:

But to if you actually watch the video looks great. You know, and

Jimmy Baratta:

I don't know how early this development is, but it already

Jimmy Baratta:

it already looks great. So I'm sure there's a lot of polish to

Jimmy Baratta:

be done. There's a lot of story writing to be done a lot of

Jimmy Baratta:

quests and testing that needs to be done. But just visually, and

Jimmy Baratta:

aesthetically, the few little things that I watched, all

Jimmy Baratta:

looked phenomenal. So I think this is a win. You know, this is

Jimmy Baratta:

confirmation of the sequel to one of the most popular games

Jimmy Baratta:

over the last 10 years and again, dominated the news this

Jimmy Baratta:

week. So okay, so

Paul Dawalibi:

put put your lawyer hat on, right? They catch

Paul Dawalibi:

the guy who did the hack. Now Rockstar wants to go after the

Paul Dawalibi:

hacker and wants to claim damages are their damages here?

Paul Dawalibi:

Because to your point, it's like, well, this is good

Paul Dawalibi:

publicity. The game didn't look that bad. It's like free

Paul Dawalibi:

marketing. Can they claim any damages here?

Jimmy Baratta:

Yeah, I mean, incredibly, incredibly hard to

Jimmy Baratta:

monetize. Even if this were a business 1/100 The size, right,

Jimmy Baratta:

and a game that won 100 The amount of people went 1000s, the

Jimmy Baratta:

amount of people played, even if this were a lot smaller, I'm

Jimmy Baratta:

saying in terms of the scope of damage, the scope of money to be

Jimmy Baratta:

made, it's always a very hard thing to prove in a court of law

Jimmy Baratta:

when you have speculation like this. That's why I'm saying that

Jimmy Baratta:

the damage here is more brand. It's more brand facing it's like

Jimmy Baratta:

what are they going to say that they sold X many fewer units,

Jimmy Baratta:

because people knew about the game. So they were less excited

Jimmy Baratta:

about it. All the evidence points to the contrary, that

Jimmy Baratta:

this is increasing the height because people are seeing what

Jimmy Baratta:

outbreak the game is realistically. And you and I

Jimmy Baratta:

have this talk all the time. The difference between justice I

Jimmy Baratta:

think and business are kind of confused. And I don't think this

Jimmy Baratta:

ever even sees a courtroom. I mean, even if they caught the

Jimmy Baratta:

guy, I don't think it ever sees a courtroom, he'd get penalized

Jimmy Baratta:

for criminally before anything civilly were to take place. And

Jimmy Baratta:

he's not going to have the assets to cover any any type of

Jimmy Baratta:

civil suit anyways.

Paul Dawalibi:

So if you're the head at Rockstar, you don't fall

Paul Dawalibi:

for the blackmail attempt. either. You don't care if he

Paul Dawalibi:

releases more footage or more source code or

Jimmy Baratta:

No, I think you double down on your, on your on

Jimmy Baratta:

your security. I think you work with the FBI to try and bring

Jimmy Baratta:

this guy to justice. And then you let the criminal court do

Jimmy Baratta:

its thing. But you don't need to squeeze out pennies from someone

Jimmy Baratta:

that doesn't have it, you got all you would have made in free

Jimmy Baratta:

press here. Interesting. I think they do want to I think they do

Jimmy Baratta:

want to send a message for future future hackers and future

Jimmy Baratta:

breaches of this nature, whether internal or external, where they

Jimmy Baratta:

don't want this type of leak. So that's why you do comply with

Jimmy Baratta:

authorities and you do whatever you can public facing to show

Jimmy Baratta:

that this is a serious issue that you're not letting it slide

Jimmy Baratta:

to try to act in that way as a deterrent. But it's really only

Jimmy Baratta:

for that sake, I think I don't think there's any tangible or or

Jimmy Baratta:

takeaway for other than that.

Paul Dawalibi:

I mean, Jimmy, do you think that there's a

Paul Dawalibi:

conclusion here, which says maybe Dr. disrespects sort of

Paul Dawalibi:

method of producing games and doing marketing around games is

Paul Dawalibi:

the way to go. So it avoids this because it sort of feels like

Paul Dawalibi:

when you have a game any triple A game that's in development for

Paul Dawalibi:

years call it write more than two or three years, it sort of

Paul Dawalibi:

feels like it's an inevitable that at some point, something

Paul Dawalibi:

will leak like you just can't control that tightly, hundreds

Paul Dawalibi:

of developers and all kinds of, you know, assets and programmers

Paul Dawalibi:

and code and right like at some point things will leak when you

Paul Dawalibi:

have that big of an operation over that many years. So is the

Paul Dawalibi:

conclusion then from a business standpoint that everyone should

Paul Dawalibi:

just open the kimono Rockstar should never have been this

Paul Dawalibi:

closed lipped about GTA they should have been talking Think

Paul Dawalibi:

about it for the last two years, they should have been showing

Paul Dawalibi:

all the milestones and updates and artwork and right like leak

Paul Dawalibi:

it themselves and control the narrative and build hype over

Paul Dawalibi:

two or three years rather than what they did, which was say

Paul Dawalibi:

absolutely nothing. Literally absolutely nothing with the

Paul Dawalibi:

understanding that maybe these leaks are now inevitable.

Jimmy Baratta:

That's a tough one. Right? And I think it's a

Jimmy Baratta:

case by case thing. Also, I think if you're constantly

Jimmy Baratta:

communicating and showing off and showing what you're working

Jimmy Baratta:

on, but maybe pushing date, you know, then you might have to

Jimmy Baratta:

push production dates, or you have to answer more questions.

Jimmy Baratta:

You get a cyberpunk kind of situation all over again, where

Jimmy Baratta:

maybe doesn't live up to expectations or it gets delayed

Jimmy Baratta:

and delayed because you're talking about it for so long. On

Jimmy Baratta:

the other end of that spectrum, if you are tight lipped and

Jimmy Baratta:

successful with it, you get the next baby Yoda right that no one

Jimmy Baratta:

knew about that grow goo was so huge with the Mandalorian it was

Jimmy Baratta:

the best kept secret. So there are big wins, I think when you

Jimmy Baratta:

can do it successfully. And there are big failures when

Jimmy Baratta:

you're overly communicative. I can't tell you which is the

Jimmy Baratta:

right path and which is the wrong one. All I can say is with

Jimmy Baratta:

regard to GTA six. This leak I think helped them if they were

Jimmy Baratta:

talking a lot about it that it was in production. Even if we

Jimmy Baratta:

hadn't seen gameplay it just wouldn't have gotten the hype

Jimmy Baratta:

that this I do know in music leaks happen all the time

Jimmy Baratta:

purposefully or not to generate hype around albums and to

Jimmy Baratta:

generate beef right between rival labels and rappers and

Jimmy Baratta:

musicians. But I think it's kind of a case by case basis. I don't

Jimmy Baratta:

know if there's a blanket rule here or not,

Paul Dawalibi:

Jimmy I'm surprised you didn't go I

Paul Dawalibi:

thought you were gonna take that thought one step further. By the

Paul Dawalibi:

way, super is in here. Hey super, who does a lot of our

Paul Dawalibi:

short form content. So if you follow us on Tik Tok, the man

Paul Dawalibi:

with the orange hat and the mustache gaming superstar in his

Paul Dawalibi:

own right, no, with the tinfoil hat theory. Do you think

Paul Dawalibi:

Rockstar made all of this up? Right? There's like this very,

Paul Dawalibi:

this very cynical meme that says, maybe this is just like

Paul Dawalibi:

Kim Kardashian sex tape leak, right? Like this is really this

Paul Dawalibi:

was not an accident. This leak was planned. So little

Jimmy Baratta:

different. A little different, Paul right.

Jimmy Baratta:

Because they're talking about hackers and getting the FBI

Jimmy Baratta:

involved. And and also claiming that Uber hack is well,

Paul Dawalibi:

you do now can name the same thing right that

Paul Dawalibi:

they were gonna get the FBI involved.

Jimmy Baratta:

You were bordering on that Jessie small

Jimmy Baratta:

at issue where I was that guy from or with the alleged hate

Jimmy Baratta:

crime when he had hired that guy to do it to himself or

Unknown:

I might be I mean, this would be kind of a genius,

Unknown:

right?

Jimmy Baratta:

That just rubs me the wrong way. It's so

Jimmy Baratta:

unethical.

Paul Dawalibi:

But kind of genius marketing. A leaked clip

Paul Dawalibi:

gets people you know, it's titillating. It's exciting

Paul Dawalibi:

right? Oh my god. I'm seeing something right. Yeah, yeah.

Paul Dawalibi:

Versus just dropping like a video of gameplay footage. Yeah,

Paul Dawalibi:

for sure. We get a lot of attention but nowhere near the

Paul Dawalibi:

amount this got you hate this idea.

Jimmy Baratta:

I don't like forcing those situations. They

Jimmy Baratta:

just seem they just rubs me the wrong way. Honestly, I

Jimmy Baratta:

understand how clever that can be and how you can use that to

Jimmy Baratta:

your benefit. I understand that leaks like you said there they

Jimmy Baratta:

have that a lot more to them. But I that's nothing that I

Jimmy Baratta:

would recommend in any boardrooms that I'd be a part

Jimmy Baratta:

of.

Paul Dawalibi:

I think there's a 50% chance that they leaked this

Paul Dawalibi:

on that this is all manufactured. That's that's

Paul Dawalibi:

where I'm at on this, but maybe I'm wrong. It just seems to Burt

Paul Dawalibi:

like he's like asking for money's that guy who hacked Uber

Paul Dawalibi:

like I don't know just feels feels like someone scripted this

Paul Dawalibi:

a little bit. Anyways, I don't know if you had any other

Paul Dawalibi:

thoughts on that. That basically gets us to the end of this

Paul Dawalibi:

week's show. Jimmy and I know it was a bit of a It was obviously

Paul Dawalibi:

a quieter one. Because it's not our usual day in time. I will

Paul Dawalibi:

say if you're watching this or listening to this after the fact

Paul Dawalibi:

we will be back next week at our usual date and time, Wednesdays

Paul Dawalibi:

2:30pm. Eastern time. Just a reminder, guys, make sure to go

Paul Dawalibi:

follow us everywhere on YouTube on Instagram on tick tock on

Paul Dawalibi:

LinkedIn, you name it all these platforms, we put out content

Paul Dawalibi:

every week on YouTube. I know like half of you watched our

Paul Dawalibi:

stuff. But don't subscribe to the channel. So make sure to

Paul Dawalibi:

subscribe to the channel because 50% of you are not. We see the

Paul Dawalibi:

data YouTube gives you the data gives us the data. So make sure

Paul Dawalibi:

to go do that. Don't miss the podcast episode this week with

Paul Dawalibi:

His Royal Highness, Prince Faisal from the Saudi esports

Paul Dawalibi:

Federation. It was a fun interview. We're going to put

Paul Dawalibi:

out more of these interviews. I did a half dozen of them at the

Paul Dawalibi:

next World Forum in Saudi Arabia with all kinds of people. So

Paul Dawalibi:

look forward to more of those coming out built we're just

Paul Dawalibi:

going to put out more episodes than usual guys in the podcast.

Paul Dawalibi:

So stay tuned for those. Jimmy Thank you. As always, thank you,

Paul Dawalibi:

everyone who was here live and don't forget the most important

Paul Dawalibi:

thing guys, the future is fun. We'll see you next week.

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