Gabriel Leydon foresees the “true dominance” of mobile games coming (interview)

Leydon: The thing about that $50 million budget — it’s fine if the console base is a billion people. Right? PlayStation 2 only got to, what, 200 million? And that was as big as it got. Mobile’s going to get to billions. So $50 million in the future will be probably average. But we’ll be talking about players in the hundreds of millions, potentially. Everything’s going to go up. The size of the audience and the size of the budget.

GamesBeat: Will the mobile game companies get into the console business?

Leydon: No. Because consoles are a waste of time. In my opinion. But that’s what I said — I think everything other than mobile is pretty much a waste of time at this point. They’re just getting good at a declining market. Practicing on making games in a declining market. Are there any more positive indicators for the console business? I don’t think there are.

GamesBeat: Sounds like we’ve gotta start reviewing mobile games.

Leydon: Well, yeah, absolutely! That’s where all the growth is, and that’s where people are playing. That’s what they’re going to be playing.  The power is that everybody’s going to have these “consoles” — these phones. And on top of that, all the games are going to be free. All of them. They’re all going to be free, and they’re all going to be in your pocket. That’s a pretty powerful thing. And then you combine that with these app stores, internet purchases, and tremendous distribution power mixed with frictionless payment systems — the most frictionless payment systems ever created. You have a recipe for the biggest gaming market ever seen.

GamesBeat: So on your technology side, do you see a need to invest in platform technology?

Leydon: Absolutely. That’s what we’re 100 percent focused on. It’s a different platform in every way. It still works similar to PC and console, but it’s free, and it has an app store and internet purchases. I look at mobile games right now, and to me, they look like Wolfenstein 3D [from 1992].

But the kind of technology that mobile games need, it’s very different from what a console needed or — you’re talking about a persistent online game. That’s not something that’s necessary on the PC because you’re not going to be near your PC all the time. The kinds of technology that we need to make our games accessible for the type of game that we’re making is very different from what I would need to do for a console game. A console game can’t send you a push notification and get you playing at two in the morning. But I can do that. The type of technology needed for the future of mobile games is new, it’s never been done before, and we’re investing very heavily in it.

GamesBeat: Is that a little like, say, Epic investing in the Unreal engine because it knew that was the future?

Leydon: Exactly. You got it. The engine that’s going to be driving mobile free-to-play has not been created yet.

GamesBeat: And how about location-related games?

Leydon: All of it. That’s part of it, too. The key technology that’s going to be driving the future of mobile games is barely starting to be created. You can see it, too, because you report on it all the time. You’re talking about HTML 5. That’ll probably be a key component. Location-based games, persistent online games — all of those types of games have never been done before, really, and where they’re going to end up five years from now, those types of games and how they’re going to be played, the technology behind it is going to be extremely complex and powerful. And it’s going to take a long time to build. We’re really in the beginning stages. It’s just like getting a 386 computer, again. All the tech that we need to make those types of games now still needs to be built.

GamesBeat: And now Activision’s got to spend a billion dollars to move into this market?

Leydon: All those guys will spend more. They’ll spend more than that. Don’t forget, the Chinese are coming, too. The Chinese free-to-play companies are bigger than the American companies. NetEase is bigger than Activision, and nobody even knows who they are. You’ve got NetEase, NetDragon, Giant, Shanda, and all of those. These are free-to-play professionals. They’re the best free-to-play developers in the world.

Gree monetizes better per year than Zynga by ten times, and look how big Gree is in the stock market. They’re all going to come over to this market because they’re good at it. We’re going to see a real shakeup. I don’t think Americans realize that the biggest game companies in the world are no longer in the United States. They’re mainly in China. When those people come over here, they’re not bad developers. They didn’t get to that size because they’re bad. They’re really good. And I think developers here are going to be blown away with the technologies and the techniques that they have and that we don’t have.

GamesBeat: So do you think the social, mobile, and online guys are going to take over E3?

Leydon: Hey, that’s a good question. Last year, it was amazing. I went there last year and we saw World of Tanks everywhere. I was blown away because that was the first real proof that free-to-play was coming to America. World of Tanks took over the whole entrance to E3.

So I would say about 25 percent of E3 last year was free-to-play. Which is unbelievable, especially if you’re an American game developer, and I’ve been doing this since 1999. That’s just unbelievable. The fact that free-to-play has that big of a presence, and pretty much in one year. They went from zero to 25 percent. So I think this year we’ll see half or more. Next year it’ll be a hundred percent, pretty much. So mobile will grow, too. That would be another shocking moment: When I walk in and the entire entrance is owned by Gree or somebody like that. I think it’s going to happen. Actually, if you want me to make a bet, I’ll bet that it won’t happen this year. But it’s not far off.

So we’re seeing the end of it, and it’s all about free-to-play. Free-to-play is it. The old stuff is over. Just forget it. It’s over. The cool thing about mobile is that mobile is the best free-to-play platform. That’s why we’re raising money, and that’s why we’re hiring — because that’s the most exciting platform. There’s a simple rule with free to play: You can’t make money if they’re not playing. If they’re not playing, you can’t monetize them. And with mobile, you have access to the player 24 hours a day.

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